* Canadian dollar falls 0.2% against the greenback
* Loonie touches its strongest level since May 22 at 1.3363
* Price of U.S. oil decreases 3.4%
* Canada's 10-year yield hits a two-year low at 1.410%
By Fergal Smith
TORONTO, June 5 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Wednesday, pulling back from an earlier two-week high as oil prices fell and the greenback halted this week's decline.
At 4:13 p.m. EDT (2013 GMT), the Canadian dollar CAD=D4 was trading 0.2% lower at 1.3419 to the greenback, or 74.52 U.S. cents. The currency touched its strongest intraday level since May 22 at 1.3363.
The turn lower for the loonie was due to a rebound in the U.S. dollar after data showed U.S. services sector activity picked up in May and due to lower oil prices, said Daniel Katzive, head of FX strategy North America at BNP Paribas (PA:BNPP) in New York.
The U.S. dollar .DXY , which has been pressured this week by speculation that the Federal Reserve would cut interest rates, gained ground against a basket of major currencies.
The price of oil, one of Canada's major exports, fell to its lowest since January after U.S. crude inventories unexpectedly surged, adding to concerns about slowing global growth. U.S. crude oil futures CLc1 settled 3.4% lower at $51.68 a barrel. labor productivity grew by 0.3% in the first quarter, reflecting a decline in hours worked for the first time in seven consecutive quarters, while business output remained virtually unchanged, Statistics Canada said. worry that weak productivity growth in Canada could hold back growth in its trade-dependent economy. House trade adviser Peter Navarro said U.S. tariffs on Mexican goods may not have to take effect because Washington now has Mexico's attention on the issue. tariffs could undermine chances of a new North American trade deal coming into force. Canada sends about 75% of its exports to the United States. government bond prices were higher across the yield curve, with the two-year CA2YT=RR up 10 Canadian cents to yield 1.338% and the 10-year CA10YT=RR rising 32 Canadian cents to yield 1.443%.
The 10-year yield touched its lowest intraday since June 2017 at 1.410%.