* Canadian dollar rises 0.5% against the greenback * Loonie touches its strongest since Jan. 21 at 1.2605 * Canadian retail sales fall 3.4% in December * Canada"s 10-year yield touches a one-year high at 1.199% TORONTO, Feb 19 (Reuters) - The Canadian dollar strengthened to a four-week high against its U.S. counterpart on Friday as the greenback broadly declined, with investors shrugging off domestic data showing a bigger-than-expected drop in retail sales. The loonie was trading 0.5% higher at 1.2615 to the greenback, or 79.27 U.S. cents. The currency touched its strongest intraday level since Jan. 21 at 1.2605. For the week, it was on track to gain 0.6%. The U.S. dollar fell against a basket of major currencies as a rally this week, triggered by higher long-term bond yields, fizzled. Canadian yields have also moved higher, signaling the economy needs less support than it did in 2020, strategists say, as investors become more confident that a successful rollout of COVID-19 vaccines will eventually boost activity and inflation. Canadian government bond yields were higher across a steeper curve in sympathy with U.S. Treasuries. The 10-year touched its highest since February last year at 1.199% before dipping to 1.196%, up 4.8 basis points on the day. Canadian retail sales fell 3.4% in December, the biggest monthly drop since April, as COVID-19 restrictions hit businesses, Statistics Canada said. Analysts had forecast a 2.5% decline. Preliminary estimates for January showed that retail sales fell 3.3%, while wholesale trade was up 5.3%. The price of oil, one of Canada"s major exports, fell from recent highs for a second day as Texas energy companies began preparing to restart oil and gas fields shuttered by freezing weather. U.S. crude prices were down 1% at $59.91 a barrel. (Reporting by Fergal Smith; editing by Jonathan Oatis)