* Canadian dollar dips 0.1% against the greenback * Loonie matches Monday's near two-week low at 1.3308 * Price of U.S. oil decreases 0.5% * Canadian bond yields rise across a steeper yield curve TORONTO, Feb 26 (Reuters) - The Canadian dollar lost ground against its broadly stronger U.S. counterpart on Wednesday as spreading of the coronavirus weighed on the price of oil, one of Canada's major exports, with the loonie approaching its lowest level in about two weeks. U.S. oil fell to its lowest level since January 2019 as Asia, Europe and oil-producing countries in the Middle East reported hundreds of new coronavirus cases and the United States warned of an inevitable pandemic. U.S. crude oil prices were down 0.5% at $49.66 a barrel. The U.S. dollar rebounded from a two-week low hit in the previous session as investors scaled back expectations that the U.S. Federal Reserve would signal more policy easing in response to a deadly virus spreading outside China. At 9:19 a.m. (1419 GMT), the Canadian dollar was trading 0.1% lower at 1.3294 to the greenback, or 75.22 U.S. cents. The currency's weakest level of the session was 1.3308, matching a near two-week low it hit on Monday. On Tuesday, protesters in Canada blocked train lines, Vancouver's port entrance and at least one highway in response to the arrest of 10 indigenous activists when police dismantled a rail barricade in southern Ontario a day earlier. Disruptions to rail could add to headwinds for Canada's economy. Last month, the Bank of Canada opened the door to an interest rate cut should a recent slowdown in domestic growth persist. Canadian government bond yields were higher across a steeper yield curve in sympathy with U.S. Treasuries as U.S. stock markets stabilized on Wednesday. The 10-year was up 2.6 basis points at 1.240%. On Monday, the 10-year yield hit a near six-month low at 1.170%. Toronto's stock market is set to recoup recent losses and continue climbing but the coronavirus outbreak and its impact on global growth could hold back prospects for a steeper uplift in valuations, a Reuters poll found. (Reporting by Fergal Smith; Editing by Steve Orlofsky)
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