(Adds strategist quotes and details throughout; updates prices) * Canadian dollar gains 0.4% against greenback * Loonie touches weakest level in nearly two weeks at 1.2589 * Price of U.S. oil settles 2.7% higher * Canadian 10-year yield touches its highest since July 15 By Fergal Smith TORONTO, Aug 10 (Reuters) - The Canadian dollar strengthened against the greenback on Tuesday as oil clawed back some recent losses and the U.S. Senate passed a $1 trillion infrastructure package, with the currency recovering from its weakest level in nearly two weeks. U.S. stock markets rose to record highs after the Senate passed a bipartisan package that could provide the nation"s biggest investment in decades in roads, bridges, airports and waterways. Canada sends about 75% of its exports to the United States, including oil, which has been pressured in recent weeks by the spread of the Delta variant of the coronavirus. "The market is growing more optimistic regarding Delta risk and that"s reflected in the oil trade and the Canadian dollar," said Adam Button, chief currency analyst at ForexLive. "Delta could be bad, but the message from the market today is that Delta is going to be manageable." Crude settled 2.7% higher at $68.29 a barrel, after hitting its lowest level in two-and-a-half months on Monday, while the Canadian dollar was trading 0.4% higher at 1.2528 to the greenback, or 79.82 U.S. cents. Earlier in the day, the currency touched its weakest level since July 28 at 1.2589. Meanwhile, Moderna Inc said it had agreed with the Canadian government to start domestic production of mRNA vaccines as the country looks to boost supplies to fight respiratory viruses, including COVID-19 and seasonal influenza. Investors awaited the release of U.S. inflation numbers on Wednesday for further indications of when the Federal Reserve may start to withdraw its stimulus for the economy. Canadian government bond yields edged higher across much of the curve. The 10-year touched its highest level since July 15 at 1.289% before pulling back to 1.264%, up 1 basis point on the day. (Reporting by Fergal Smith Editing by Paul Simao and Sonya Hepinstall) Our Standards: The Thomson Reuters Trust Principles.