(Adds strategist quote and details throughout; updates prices) * Canadian dollar weakens 0.4% against the greenback * Touches its weakest level since July 21 at 1.2648 * Canadian housing starts fall 3.2% in July * Canadian 10-year yield hits a near two-week low at 1.120% By Fergal Smith TORONTO, Aug 17 (Reuters) - The Canadian dollar on Tuesday weakened to its lowest level in nearly four weeks against the greenback, as risk aversion weighed on global financial markets and a key technical level for the currency was breached. The loonie was trading 0.4% lower at 1.2625 to the greenback, or 79.21 U.S. cents, after touching its weakest since July 21 at 1.2648. "Risk-off conditions, along with softer oil prices have weighed on the CAD," Ronald Simpson, managing director, global currency analysis at Action Economics, said in a note. Global share markets stumbled, rattled by disappointing U.S. retail sales data and a surge in COVID-19 infections worldwide driven by the Delta variant. Canada is a major producer of commodities, including oil, so its economy is sensitive to global economic prospects. U.S. crude futures settled 1% lower at $66.59 a barrel, its fourth day of declines. Monday"s close for USD-CAD above the 200-day average added to pressure on the loonie, said Simpson. The 200-day moving average is at about 1.2560. In domestic data, housing starts fell 3.2% in July compared with the previous month as a drop in multiple urban starts outweighed an increase in single-detached urban ones, data from the national housing agency showed. Canadian inflation data is due on Wednesday, which could offer clues on the Bank of Canada"s policy outlook. Canada"s election campaign could also affect investor sentiment. Mail-in voting is set to soar ahead of the Sept. 20 election amid fears of COVID-19, and the complex registration process could deter voters, possibly undermining Liberal Prime Minister Justin Trudeau"s bid for a majority government. Canadian government bond yields were mixed across a flatter curve. The 10-year hit its lowest level since Aug. 4 at 1.120% before recovering to 1.140%, down 2.5 basis points on the day. (Reporting by Fergal Smith; Editing by Bernadette Baum and Jonathan Oatis) Our Standards: The Thomson Reuters Trust Principles.