(Adds details on CFTC data, NAFTA, Bank of Canada communication; updates prices)
* Canadian dollar at C$1.2765, or 78.34 U.S. cents
* Canada's annual inflation rate falls to 1.4 percent in October
* Loonie touches its weakest since Nov. 3 at C$1.2824
* Bond prices higher across the yield curve
TORONTO, Nov 17 (Reuters) - The Canadian dollar weakened to a two-week low against its U.S. counterpart on Friday after tame inflation data tempered prospects for Bank of Canada interest rate hikes, but losses for the currency were pared as oil rallied more than 2 percent.
Canada's annual inflation rate decreased to 1.4 percent last month from 1.6 percent in September, while a recent uptrend in the Bank of Canada's measures of core inflation stalled.
The report was slightly "dovish" due to the potential for those core measures to plateau in the near term, said Derek Holt, head of capital markets economics at Scotiabank.
Chances of another rate hike by the Bank of Canada through March slipped to about 60 percent from 70 percent before the data, the overnight index swaps market indicated.
The central bank has held off from raising rates since September because of worries about a number of uncertainties for the outlook of the economy, including renegotiation of the North American Free Trade Agreement (NAFTA).
A key round of talks to update NAFTA formally opened on Friday with Canada and Mexico seeking to show more flexibility about addressing hardline U.S. demands that they had previously dismissed as unworkable.
The decision this week by Canada's central bank to add more speeches from policymakers to its schedule after an interest rate decision will not do enough to provide better forward guidance on monetary policy, analysts said.
U.S. crude oil prices settled 2.6 percent higher at $56.55 a barrel. Oil is one of Canada's major exports.
At 4 p.m. ET (2100 GMT), the Canadian dollar was trading at C$1.2765 to the greenback, or 78.34 U.S. cents, down 0.1 percent. It touched its weakest level since Nov. 3 at C$1.2824.
For the week, the loonie fell 0.6 percent.
Speculators have cut bullish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed. As of Nov. 14, net long positions had slipped to 47,335 contracts from 50,889 a week earlier.
In October, bullish bets had reached 76,392 contracts, the highest in five years.
Canadian government bond prices were higher across the yield curve, with the two-year up 4.5 Canadian cents to yield 1.457 percent and the 10-year rising 31 Canadian cents to yield 1.936 percent.
The gap between Canada's 2-year yield and its U.S. equivalent widened by 3.6 basis points to a spread of -26.8 basis points. (Reporting by Fergal Smith; Editing by Lisa Von Ahn and Sandra Maler)