(Adds dealer quotes and details throughout; updates prices) * Canadian dollar touches strongest level since Sept. 14 * Price of U.S. oil increases 1.9% * Canadian 10-year yield hits a near three-month high By Fergal Smith TORONTO, Sept 27 (Reuters) - The Canadian dollar strengthened to its highest level in nearly two weeks against the greenback on Monday as oil prices rose and the impact of last week"s hawkish shift by the U.S. Federal Reserve receded. The price of oil, one of Canada"s major exports, rose for a fifth day as investors fretted about tighter supplies. Oil has appreciated extensively since August and, "The Canadian dollar has followed suit," said Darren Richardson, chief operating officer at Richardson International Currency Exchange Inc. U.S. crude oil futures were up 1.9% at $75.38 a barrel, while the Canadian dollar gained 0.3% to 1.2620 per greenback, or 79.24 U.S. cents, after touching its strongest level since Sept. 14 at 1.2610. The currency has recovered from 1.2895 last Monday as investors grew less fearful of fallout from troubled property developer China Evergrande Group and became more prepared for reduced economic stimulus from the Federal Reserve. Last Wednesday, the Fed cleared the way to reduce its monthly bond purchases "soon." "The market more or less has already priced in the Fed looking at tapering its quantitative easing program," Richardson said. Speculators have raised their bearish bets on the Canadian dollar to the highest level since August 2020, data from the U.S. Commodity Futures Trading Commission showed on Friday. Canadian GDP data for July is due on Friday, which could offer clues on the Bank of Canada"s policy outlook. The central bank expects factors pushing up inflation to be transitory. But price pressures could be fueled further if Prime Minister Justin Trudeau presses ahead with spending plans outlined during the election campaign. Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries. The 10-year touched its highest since June 30 at 1.424% before dipping to 1.403%, up 2.8 basis points on the day. (Reporting by Fergal Smith; Editing by Steve Orlofsky and Alistair Bell)