* Canadian dollar rises 0.2% against the greenback
* Loonie touches its strongest since May 10 at 1.3396
* Price of U.S. oil eases 0.2%
* Canada's 10-year yield rises to near three-week high at 1.764%
By Fergal Smith
TORONTO, May 21 (Reuters) - The Canadian dollar strengthened to an 11-day high against the greenback on Tuesday as investors calculated that the threat of trade uncertainty would ease for Canada even as they ramped up on countries with close economic links to China.
Signs that Asia is already feeling the pinch from a trade conflict between the United States and China pushed the U.S. dollar .DXY to a four-week high against a basket of major currencies. have worried that U.S. restrictions on Chinese telecoms equipment maker Huawei Technologies Co Ltd HWT.UL would lead to an escalation in the trade tensions between Washington and Beijing.
Meanwhile, the United States has agreed to lift tariffs on steel and aluminum from Canada and Mexico. Canadian Foreign Minister Chrystia Freeland has since said that Canada will move quickly to ratify the new North American trade pact, called the United States-Mexico-Canada Agreement, or USMCA. Canadian dollar just gets a pass," said Mark McCormick (NYSE:MKC), North American head of FX strategy at TD Securities. "What's clear is that (U.S. President Donald) Trump seems to only have the ability to fight one trade war at a time and that speeds up the process of trying to get USMCA ratification complete."
Canada sends about 75% of its exports to the United States, including oil.
Oil futures were steady on Monday as the prospect of mounting U.S.-Iran tensions disrupting supply was offset by concerns that a lengthy trade war between Washington and Beijing would limit crude demand. U.S. crude oil futures CLc1 settled 0.2% lower at $62.99 a barrel. O/R
At 3:58 p.m. EDT (1958 GMT), the Canadian dollar CAD=D4 was trading 0.2% higher at 1.3404 per greenback, or 74.60 U.S. cents, the second best performance among Group of 10 currencies after the Norwegian crown NOK= .
The loonie touched its strongest level since May 10 at 1.3396.
Canada's housing market will stay stuck in the doldrums, with average prices stagnating this year and then rising 1.7% next year, hardly keeping pace with inflation, a Reuters poll of economists and property market experts showed. government bond prices were lower across the yield curve as the market reopened following the country's Victoria Day holiday on Monday.
The two-year CA2YT=RR fell 13 Canadian cents to yield 1.676% and the 10-year CA10YT=RR declined 64 Canadian cents to yield 1.757%. The 10-year yield posted its highest intraday level since May 3 at 1.764%.