*

Canadian dollar gains 0.3% against the greenback

*

Touches its strongest level since January 7 at 1.3815

*

Price of US oil settles 1.8% higher

*

Bond yields rise across steeper curve

By Fergal Smith

TORONTO, Jan 20 (Reuters) - The Canadian dollar

strengthened to nearly ‌a two-week high against its U.S.

counterpart on Tuesday as investors' negative reaction to the

threat ​of a fresh U.S. trade clash with Europe weighed on ‍the

greenback.

The loonie was trading 0.3% higher at ⁠1.3830 per U.S.

dollar, ⁠or 72.31 U.S. cents, after touching its strongest

intraday level since January 7 at 1.3815.

"We're ‌seeing the U.S. dollar take ​it on the chin and

obviously the Canadian dollar is benefiting as a result of that

movement," said Rahim Madhavji, ⁠president at

KnightsbridgeFX.com. "It looks like the ‍market ​is rattled by the

actions of the U.S. administration."

The U.S. dollar posted its biggest decline since August

against a basket of major ‍currencies after White House threats

to Europe over the future of Greenland triggered a broad selloff

across U.S. stocks and government bonds.

Canadian Prime Minister Mark Carney said his country

strongly opposed any tariffs being imposed by the U.S. to

further President Donald Trump's aim ​of ‍acquiring Greenland.

Carney is trying to foster a new global trading order by working

more closely with China and inking smaller ​trade deals, but

faces constraints from Canada's still overwhelming economic

dependency on the U.S. market.

Canada sends the majority of its exports to the U.S.,

including oil. U.S. crude oil futures settled 1.8% higher

at $60.34 a barrel on the temporary suspension of output at

Kazakhstan's oil fields and expectations of firmer global

economic ​growth that could drive fuel demand.

Canadian bond yields moved higher across a steeper curve as

investors globally reacted to turbulence in Japanese government

bonds. The 10-year was up ‍4.6 basis points at

3.431%.