* C$ falls back to C$0.9667, or $1.0344
* Hit 3-year high of C$0.9616, or $1.0400, in early trade
* Bond prices mixed
TORONTO, April 4 (Reuters) - The Canadian dollar was lower against the U.S. dollar on Monday morning, after hitting a three-year high in early trade, as oil prices eased off highs and as the greenback strengthened on short-covering.
The Canadian dollar hit as high as C$0.9616 to the U.S. dollar, or $1.0400, before easing back below Friday's close.
At 9:31 a.m. (1331 GMT), the currencywas at C$0.9667 to the U.S. dollar, or $1.0344, down from Friday's North American finish of C$0.9644 to the U.S. dollar, or $1.0369.
"The market is taking back some (U.S.) dollar short-sell ... the Canadian dollar is slightly weaker along with other commodities, high-beta currencies, with the euro flat and having difficulty in getting through technical resistance," said Jack Spitz, managing director of foreign exchange at National Bank Financial Group.
The euro fell from a five-month peak against the U.S. dollar as investors priced in expectations of an increase in euro zone interest rates. [FRX/]
Selling in the Australian dollar, a commodities-linked sister currency to the Canadian dollar, inspired some short-dollar-covering as well, Spitz said. "Look for Aussie to be a price-directional provider for USD/CAD."
"The primary factor is still the broader commodity price movement," said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets.
The high of C$0.9616 was the Canadian dollar's highest level since November 2007, when it touched C$0.9059, or $1.1039.
Merger and acquisition activity may help buoy the Canadian currency. Minmetals Resources, China's biggest metals trading firm, has offered $6.5 billion to buy Canadian-listed Equinox Minerals .
Canadian bond prices were mixed across the curve, with two-year bond prices higher. South of the border, Chandler noted some support for shorter-dated bonds as well, in part due to hawkish comments from William Dudley, one of the Federal Reserve's most powerful policymakers. [US/]
The two-year bondwas up 1.5 Canadian cents to yield 1.824 percent, while the 10-year bond lost 2 Canadian cents to yield 3.370 percent. (Reporting by Solarina Ho; editing by Peter Galloway)
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