* Canadian dollar strengthens 0.3% against greenback
* Touches strongest level since June 10 at 1.2732
* Price of U.S. oil rises 0.9%
* Canadian bond yields rise across steeper curve
TORONTO, Aug 11 (Reuters) - The Canadian dollar climbed to its highest level in more than two months against a broadly weaker U.S. counterpart on Thursday as oil prices rose and investors weighed further evidence of cooling inflation in the United States.
The S&P 500 index was trading at its highest level in more than three months and the U.S. dollar fell against a basket of major currencies as data showed U.S. producer prices unexpectedly fell in July, feeding hopes of smaller Federal Reserve interest rate hikes.
Sentiment was already upbeat after U.S. data on Wednesday showed consumer prices rose at a slower-than-expected annual pace last month.
Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to risk appetite.
The Canadian dollar
Canadian government bond yields were higher across much of a
steeper curve, with the 10-year
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