* Canadian dollar falls 0.8% against the greenback * Price of Brent crude oil decreases about 19% * Canadian retail sales rise 0.3% in February * Canadian bond yields decline across a flatter curve By Fergal Smith TORONTO, April 21 (Reuters) - The Canadian dollar weakened to a near three-week low against its U.S. counterpart on Tuesday, as plunging oil prices overshadowed a stronger-than-expected increase for domestic retail sales in February. Benchmark Brent and U.S. oil futures for June delivery plunged to around two-decade lows, a day after U.S. May futures sank into negative territory for the first time in history as demand tumbled due to the coronavirus crisis. Brent crude oil futures lost 19.1% to $20.70. Canada is a major exporter of crude oil. "The CAD has taken a hit from the combined impact of weak crude prices and the push higher in the VIX index back above 40 over the past two sessions," Shaun Osborne, chief FX strategist at Scotiabank, said in a note. The VIX index is a measure of expected stock market volatility. It was trading about 8% higher at 47.34 on Tuesday. At 9:09 a.m. (1309 GMT), the Canadian dollar was trading 0.8% lower at 1.4230 to the greenback, or 70.27 U.S. cents. The currency touched its weakest intraday level since April 2 at 1.4263. Canadian retail sales were up 0.3% month-over-month in February, before social distancing measures began, on higher sales at motor vehicle and parts dealers, Statistics Canada said. Analysts had forecast a 0.2% increase. "February feels like a lifetime ago" Benjamin Reitzes, Canadian rates & macro strategist at BMO Capital Markets, said in a note. "Expect a very different tone for retail sales over the next few reports." Canada's inflation report for March is due on Wednesday, which could help guide expectations for additional easing measures from the Bank of Canada. The Bank of Canada has slashed interest rates by 150 basis points since March and begun buying Canadian government bonds. Last week, the central bank said it would broaden its asset-purchase, or quantitative easing, program to include provincial and corporate debt. Canadian government bond yields were lower across a flatter curve, with the 10-year down 6 basis points at 0.568%. (Reporting by Fergal Smith; editing by Jonathan Oatis)
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