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CANADA FX DEBT-Canadian dollar notches near 3-year high as commodities rally

 (Adds strategist quotes and details throughout; updates prices)
    * Loonie touches its strongest since April 2018 at 1.2580
    * Price of U.S. oil settles 3.8% higher
    * Canada's 10-year yield touches a one-year high at 1.256%

    By Fergal Smith
    TORONTO, Feb 22 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Monday, holding near its
strongest level in nearly three years as oil rallied and the
greenback broadly lost ground.
    The loonie        was trading nearly unchanged at 1.2606 to
the greenback, or 79.33 U.S. cents, having touched its strongest
intraday level since April 2018 at 1.2580.        
    "Commodity-linked currencies have had a stellar performance
in recent days thanks to widespread and sharp gains in the
prices of a wide variety of commodities," said Erik Nelson, a
currency strategist at Wells Fargo.
    U.S. crude oil futures settled 3.8% higher at $61.49 a
barrel, driven by the expected slow return of U.S. crude output
after last week's deep freeze in Texas shut in production.
Copper        rose 1.6%, while gold        was up
1.4%.                
    "Canada's yields have been able to keep up with and in fact
outpace gains in U.S. yields, which has further bolstered the
Canadian currency," Nelson said.
    The gap between Canadian and U.S. 2-year yields has climbed
11 basis points since January to 13 basis points in favor of the
Canadian bond.   
    The U.S. dollar resumed its slide against major currencies
on Monday as traders focused on whether coronavirus
vaccinations, economic growth expectations and higher inflation
could push bond yields higher.             
    Canadian government bond yields rose across a steeper curve
in sympathy with U.S. Treasuries. The 10-year            
touched its highest since February last year at 1.256% before
pulling back to 1.238%, up 2.5 basis points on the day.        
    Bank of Canada Governor Tiff Macklem is due to speak on
Tuesday on the impact of the coronavirus crisis on the labor
market. The central bank has projected that Canada's economy
would contract in the first quarter after lockdowns were
implemented by a number of provinces to curb the spread of the
pandemic.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky and
Alistair Bell)
  
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