* Canadian dollar falls 0.5% against the greenback * Canadian wholesale trade rises 0.9% in December * Price of U.S. oil tumbles 4.7% * Canadian bond yields decline across a flatter yield curve TORONTO, Feb 24 (Reuters) - The Canadian dollar weakened to a near two-week low against its U.S. counterpart on Monday as spreading of the coronavirus epidemic outside of China worried investors, overshadowing a bigger-than-expected gain for domestic wholesale trade. Europe's share markets suffered their biggest slump since mid-2016, as a jump in coronavirus cases in Italy, South Korea, Japan and Iran sent investors scrambling to the security of gold and government bonds. Canada is a major exporter of commodities, including oil, so its economy could be hurt if spreading of the virus were to slow global economic growth. U.S. crude oil futures were down 4.7% at $50.87 a barrel. Canadian wholesale trade increased by 0.9% in December from November on stronger sales in the motor vehicles and motor vehicle parts and accessories subsector, Statistics Canada said. Analysts had forecast a 0.5% increase. Canada's GDP reports for December and for the fourth quarter are due on Friday. Last month, the Bank of Canada opened the door to an interest rate cut should a recent slowdown in domestic growth persist. At 9:26 a.m. (1426 GMT), the Canadian dollar was trading 0.5% lower at 1.3287 to the greenback, or 75.26 U.S. cents. The currency, which was up 0.2% last week, hit its weakest intraday level since Feb. 11 at 1.3308. Speculators have cut their bullish bets on the Canadian dollar to the lowest since October, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Feb. 18, net long positions had fallen to 7,817 contracts from 9,705 in the prior week. Police moved in on Monday morning to clear a rail blockade by an indigenous group in eastern Canada that had been stopping freight and passenger traffic for more than two weeks on one of the country's busiest lines. Canadian miner Teck Resources Ltd has withdrawn an application to build its C$20.6 billion Frontier oil sands mine in Alberta, days before the federal government was to decide on whether to approve the project, opposed by environmentalists and indigenous groups. Canadian government bond yields were lower across a flatter yield curve in sympathy with U.S. Treasuries. The 10-year yield fell 9.3 basis points to 1.188%, having touched its lowest intraday level since Sept. 5, last year at 1.183%. (Reporting by Fergal Smith)
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