(Adds strategist quote and details throughout, updates prices) * Canadian dollar weakens 0.1% against greenback * Loonie trades in a range of 1.2351 to 1.2396 * Price of U.S. oil settles 1.1% higher * Canadian 10-year yield eases 2.2 basis points By Fergal Smith TORONTO, Oct 26 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Tuesday as the risk that the Bank of Canada would temper investor expectations for earlier interest rate hikes offset higher oil prices. The BoC could become the first central bank from a G7 country to end stimulus from its pandemic-era bond-buying program at an interest rate announcement on Wednesday. The central bank has pledged to keep rates at a record low 0.25% until economic slack is absorbed, which would happen in the second half of 2022 in its latest forecast. But money markets have moved in recent weeks to price in a hike by April. "For the Bank of Canada, there is a chance you see a dovish surprise and if that happens you could see some short-term Canadian dollar weakness," said Edward Moya, a senior market analyst at OANDA in New York. The Canadian dollar was trading 0.1% lower at 1.2388 to the greenback, or 80.72 U.S. cents, having traded in a range of 1.2351 to 1.2396. Last Thursday, it touched its strongest level in nearly four months at 1.2287. The price of oil, one of Canada"s major exports, was supported by a global supply shortage and strong demand in the United States, the world"s biggest consumer. U.S. crude oil futures settled up 1.1% at $84.65 a barrel, its highest level since 2014. Canadian Prime Minister Justin Trudeau sparked concern in the country"s oil patch and hope among green advocates when he named two men with strong environmental records to lead his government"s fight against climate change. Canadian government bond yields were mixed across a flatter curve. The 10-year yield eased 2.2 basis points to 1.631%, after touching on Friday its highest level since January of 2020 at 1.713%. (Reporting by Fergal Smith Editing by Paul Simao and Marguerita Choy)