* Canadian dollar trades near flat against greenback
* Loonie touches strongest intraday since Sept. 21 at 1.3242
* Canada's trade deficit narrows in August to C$2.45 billion
* Canadian bond yields ease across flatter curve
By Fergal Smith
TORONTO, Oct 6 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Tuesday as oil prices rose and data showed a slowdown in Canada's merchandise trade, with the loonie steadying after it notched an earlier two-week high.
Canada's trade deficit narrowed slightly in August to C$2.45 billion from a revised C$2.53 billion in July, Statistics Canada said. Exports and imports fell after two months of strong growth. volumes still have a way to go before returning to pre-COVID levels," said Ryan Brecht, a senior economist at Action Economics.
One of Canada's major exports is oil. Its price was up for a second straight day amid supply disruptions in Norway, a new hurricane in the Gulf of Mexico, and U.S. President Donald Trump's return to the White House after being treated for COVID-19 in a military hospital. crude CLc1 prices were up 2.4% at $40.16 a barrel, while the Canadian dollar CAD= was trading nearly unchanged at 1.3260 to the greenback, or 75.41 U.S. cents. It touched its strongest intraday level since Sept. 21 at 1.3242.
Separate data showed that home sales in the area of Toronto, Canada's most populous city, rose for the third consecutive month in September. Low borrowing costs and pent-up demand lifted transactions by 42% from a year ago, helping to break average sale price records for the fourth straight month. September employment report is due on Friday, which can help guide expectations for the strength of the economic recovery. Bank of Canada Governor Tiff Macklem is scheduled to speak on Thursday.
Canadian government bond yields were lower across a flatter curve on Tuesday, with the 10-year CA10YT=RR falling 1.6 basis points to 0.609%. Earlier in the day, it touched its highest level since Sept. 1 at 0.631%.