* Canadian dollar weakens 0.4% against the greenback
* Touches its weakest since Dec. 13 at 1.3605
* Canadian bond yields ease across the curve
TORONTO, Feb 28 (Reuters) - The Canadian dollar weakened to a 2-1/2 month low against its U.S. counterpart on Wednesday as the recent equities rally lost some momentum and investors braced for domestic GDP data that could offer clues on the interest rate outlook.
The loonie was trading 0.4% lower at 1.3580 to the U.S. dollar, or 73.64 U.S. cents, after touching its weakest intraday level since Dec. 13 at 1.3605.
"It feels like at the margin there is a little bit more concern about the durability of this rally in risk and I suspect that's what hit the Canadian dollar to a degree today," said Bipan Rai, global head of FX strategy at CIBC Capital Markets.
Canada is a major producer of commodities, including oil, so the currency tends to be sensitive to the signal that stocks and other risk-sensitive assets send about the economic outlook.
Wall Street's main indexes slipped ahead of an inflation reading on Thursday that would influence bets on when the Federal Reserve will start cutting U.S. interest rates.
Canada is also due to release major economic data on Thursday, which is expected to show the economy expanding at an annualized rate of 0.8% in the fourth quarter.
"We should expect a slight pick up in activity but that's going to be tied primarily to investment in the supply side which isn't exactly the type of growth that the Bank of Canada should be concerned about," Rai said.
The Canadian central bank is expected to leave its benchmark interest rate on hold at 5% at a policy decision next Wednesday.
Canadian government bond yields eased across the curve, with the 10-year down 2.5 basis points at 3.531%.
A green bond offering previously announced by the government was priced to yield 3.545%. The C$4 billion 10-year bond has a coupon of 3.5%. (Reporting by Fergal Smith; Editing by Richard Chang)
