(Adds economist quote and details on activity; updates prices)
    * Canadian dollar advances 0.5% against the greenback
    * Canadian home sales jump 26% in July from June
    * Price of U.S. oil increases 2.1%
    * Canadian bond yields ease across a flatter curve

    By Fergal Smith
    TORONTO, Aug 17 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Monday as oil prices climbed and
domestic data showed a surge in home sales to a record high,
with the loonie nearing its strongest level in nearly seven
months.
    Canadian home sales rose 26% in July from June, posting the
highest monthly level ever recorded, the Canadian Real Estate
Association (CREA) said, as pent-up demand following lockdowns
continued to fuel the market.             
    "Any macro bet with a short Canadian housing thesis has
gotten scorched yet again," said Derek Holt, vice President of
capital markets economics at Scotiabank.
    The price of oil, one of Canada's major exports, rose as
China's plans to increase U.S. crude imports countered rising
tensions between the two major consumers.             
    U.S. crude prices         settled up 2.1% at $42.89 a
barrel, while the Canadian dollar        was trading 0.5% higher
at 1.3198 to the greenback, or 75.77 U.S. cents. The currency,
which last Thursday touched its strongest intraday level since
Jan. 30 at 1.3188, traded in a range of 1.3192 to 1.3262.    
    The U.S. dollar fell against a basket of major currencies
ahead of the release of minutes this week of the Federal
Reserve's last policy meeting. Speculation is rife the U.S.
central bank will adopt an average inflation target.
            
    Speculators have raised bearish bets on the loonie to the
highest in seven weeks, data from the U.S. Commodity Futures
Trading Commission showed on Friday.
    Canadian Prime Minister Justin Trudeau and Finance Minister
Bill Morneau were scheduled to meet on Monday in a bid to sort
out their differences, said a Reuters source aware of the
meeting.             
    Canadian government bond yields were lower across a flatter
curve. The 10-year             fell 3.1 basis points to 0.582%,
extending its pullback from a two-month high last Thursday at
0.642%.

 (Reporting by Fergal Smith
Editing by Paul Simao and Marguerita Choy)
  

Source: Read Full Article