* Canadian dollar weakens 0.3% against the greenback
* Touches its weakest since March 24 at 1.3779
* Price of U.S. oil settles 5.6% lower
* Canadian bond yields pull back from multi-year highs
TORONTO, Oct 4 (Reuters) - The Canadian dollar weakened to a six-month low against its U.S. counterpart on Wednesday as a sharp drop in the price of oil weighed on commodity-linked currencies.
The loonie was trading 0.3% lower at 1.3750 to the greenback, or 72.73 U.S. cents, after touching its weakest intraday level since March 24 at 1.3779.
Of some relief for the currency was a steadying in global bond yields after a sharp spike in recent days that rattled investors.
"Even though there was a reversal in the drivers that have led the loonie lower, it's still not catching a bid because of this reversal in oil," said Jay Zhao-Murray, market analyst at Monex Canada Inc.
U.S. crude oil futures settled down 5.6% at $84.22 a barrel following reports that Russia may lift its diesel ban in coming days and U.S. government data that indicated weak demand for gasoline.
Among G10 currencies, only the Norwegian crown posted a larger decline than the loonie. Norway, like Canada, is a major exporter of oil. I
Canadian employment data for September, due on Friday, could offer clues on the strength of the domestic economy. Economists forecast a 20,000 jobs gain.
Canadian government bond yields were lower across the curve, tracking moves in U.S. Treasuries. The 10-year eased 10 basis points to 4.175% after touching on Tuesday its highest intraday level in 16 years at 4.292%. (Reporting by Fergal Smith Editing by Marguerita Choy)
