CANADA FX DEBT-Canadian dollar hits 2-week low as risk appetite crumbles

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* Canadian dollar weakens 0.9% against greenback * Touches weakest level since Jan. 7 at 1.2698 * Price of U.S. oil falls 3.4% * Canadian bond yields fall across flatter curve TORONTO, Jan 24 (Reuters) - The Canadian dollar weakened on Monday to its lowest level in more than two weeks against its U.S. counterpart as investors dumped riskier assets on fears of a Russian attack on Ukraine https://www.reuters.com/world/europe/nato-sends-ships-jets-eastern-europe-ukraine-crisis-2022-01-24. Shares across the world and the price of oil, one of Canada's major exports, fell as the geopolitical risk added to investor worries about aggressive policy tightening by the Federal Reserve. U.S. crude prices were down 3.4% at $82.27 a barrel, while the Canadian dollar was trading 0.9% lower at 1.2694 to the greenback, or 78.78 U.S. cents. It touched its weakest level since Jan. 7 at 1.2698. Speculators had turned bullish on the Canadian dollar for the first time since November, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Jan. 18, speculators were net long 7,492 contracts of the loonie, swinging from net short 7,376 contracts in the prior week. The shift in positioning comes ahead of a potential interest rate hike by the Bank of Canada at a policy announcement on Wednesday. Money markets see about a 65% chance of a hike but expectations have dipped from 70% on Friday. The Canadian bond market is coming to the view that expected multiple interest rate hikes this year by the Bank of Canada will bring price pressures under control, albeit at a cost of slower economic growth. Canadian government bond yields were lower across a flatter curve, with the 10-year down 5 basis points at 1.742%. Last Wednesday, it touched its highest level in nearly three years at 1.905%. (Reporting by Fergal Smith Editing by Mark Heinrich)

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