* Canadian dollar falls 0.5% against the greenback
* Loonie touches its weakest since April 26 at 1.3494
* Price of U.S. oil falls 1.1%
* Canadian bond prices rise across a flatter yield curve
TORONTO, May 6 (Reuters) - The Canadian dollar weakened to a 10-day low against its U.S. counterpart on Monday as investors worried about a potential escalation of the trade dispute between the United States and China that could hurt the global economy.
Global stocks .WORLD fell after U.S. President Donald Trump in a surprising move threatened to hike tariffs on Chinese goods this week. runs a current account deficit and exports many commodities, including oil, so its economy could suffer if the global flow of capital or trade slows. U.S. crude oil futures CLc1 were down 1.1% at $61.26 a barrel.
Meanwhile, Canada is leaning on the United States to help settle a dispute with China, which has started to block imports of vital Canadian commodities amid a dispute over a detained Huawei executive. 9:19 a.m. (1319 GMT), the Canadian dollar CAD=D4 was trading 0.5% lower at 1.3482 to the greenback, or 74.17 U.S. cents. The currency, which last week gained 0.3% as U.S. data showed muted wage inflation, touched its weakest intraday level since April 26 at 1.3494.
On Friday, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed that speculators have cut their bearish bets on the Canadian dollar for the second straight week. As of April 30, net short positions had fallen to 46,745 contracts from 47,493 in the prior week.
Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries, with the two-year CA2YT=RR up 5 Canadian cents to yield 1.616% and the 10-year CA10YT=RR rising 39 Canadian cents to yield 1.723%.
On Friday, the 10-year yield touched its highest intraday since April 23 at 1.790%.