* Canadian dollar rises 0.2% against the greenback * Canadian retail sales flatlined in December * Price of U.S. oil decreases 1.4% * Canadian bond yields fall across a flatter yield curve By Fergal Smith TORONTO, Feb 21 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Friday as the greenback gave back some recent gains against a basket of other major currencies and a measure of domestic underlying retail sales rose in December. Canadian retail sales were unchanged in December from November at C$51.65 billion, undershooting the 0.1% gain that analysts had expected, data from Statistics Canada showed. But sales were more robust after excluding motor vehicles and parts dealers, rising 0.5%. "Retail sales extended the string of disappointing readings on the Canadian economy, but some of the stripped down measures proved more encouraging than the headline," said Royce Mendes, a senior economist at CIBC Capital Markets. Last month, the Bank of Canada left the door open to an interest rate cut should a recent slowdown in domestic growth persist. Investors see about a 50% chance that the central bank would ease by April. At 10:09 a.m. (1509 GMT), the Canadian dollar was trading 0.2% higher at 1.3235 to the greenback, or 75.56 U.S. cents. The currency traded in a range of 1.3233 to 1.3269. For the week, the loonie was up 0.1%. The U.S. dollar pulled back from a three-year peak as traders swooped back into the Japanese currency after its worst four-day run in more than two years. Stocks on Wall Street and the price of oil, one of Canada's major exports, fell as a rise in new cases of coronavirus and weak Asian data fueled uncertainty about the economic outlook. U.S. crude oil futures were down 1.4% at $53.12 a barrel. Canadian government bond yields were lower across a flatter yield curve in sympathy with U.S. Treasuries. The 10-year yield fell 10.5 basis points to 1.254%, nearly its lowest since October. (Reporting by Fergal Smith; Editing by Steve Orlofsky)
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