(Adds details throughout; updates prices) * Canadian dollar weakens 0.5% against the greenback * Touches its strongest intraday level since June 25 at 1.2289 * Price of U.S. oil settles 1.1% lower * Canadian 10-year yield touches its highest since January 2020 By Fergal Smith TORONTO, Oct 21 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as oil prices fell and Ottawa said it would wind down broad-based pandemic-era economic support, with the loonie pulling back from an earlier four-month high. The loonie was trading 0.5% lower at 1.2375 to the greenback, or 80.81 U.S. cents, its biggest decline since Sept. 29. Earlier, the currency touched its strongest level since June 25 at 1.2289. "The correlation between the CAD and oil prices remains a big factor for USD-CAD direction," Ronald Simpson, managing director, global currency analysis at Action Economics, said in a note. Oil , one of Canada"s major exports, settled 1.1% lower at $82.50 a barrel as a forecast for a warm U.S. winter put the breaks on a rally that drove prices to multi-year highs. Recent gains for oil prices have contributed to inflation pressures, with data on Wednesday showing that Canada"s annual inflation rate climbed in September to an 18-year-high. That has put the focus on the Bank of Canada ahead of an interest rate decision next week. The data has "served to bolster market confidence in monetary policy tightening risks in Canada," strategists at Scotiabank, including Shaun Osborne, said in a note. Scotiabank expects the BoC to hike rates by 100 basis points in the second half of next year, according to a forecast update on Wednesday. It had previously expected 50 basis points of tightening. Canada will not extend existing broad-based COVID-19 support programs for companies and individuals when they expire on Saturday because the economy is recovering well, Finance Minister Chrystia Freeland said. Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year touched its highest level since January last year at 1.693% before dipping to 1.687%, up 3.9 basis points on the day. (Reporting by Fergal Smith, Editing by Nick Zieminski)