* Canadian dollar strengthens 0.2% against the greenback
* For the week, the loonie is on track to gain 0.6%
* Canadian retail sales rise 3.6% in March
* Price of U.S. oil rises 1.9%
TORONTO, May 21 (Reuters) - The Canadian dollar rose against
its U.S. counterpart on Friday as investor worries about U.S.
inflation receded and domestic data showed retail sales climbing
in March, with the loonie moving closer to a six-year high
notched earlier in the week.
Canadian retail sales rose 3.6% in March from February,
surpassing estimates for a 2.3% increase, data from Statistics
Canada showed.
A flash estimate for April, when tighter restrictions to
battle the coronavirus pandemic were imposed by some provinces,
showed sales declining 5.1%.
World stock markets edged higher after a volatile week,
taking their lead from a stronger Wall Street as U.S. business
activity data tempered inflation fears.
The price of oil, one of Canada's major exports, rose after
three days of losses, but were on track for a weekly fall as
investors braced for the return of Iranian crude supplies.
U.S. crude prices rose 1.9% to $63.1 a barrel, while
the Canadian dollar was trading 0.2% higher at 1.2029 to
the greenback, or 83.13 U.S. cents.
The loonie was on track to rise 0.6% for the week, which
would be its eighth straight weekly advance. On Tuesday, it
touched its strongest level since May 2015 at 1.2013.
The U.S. dollar hit its lowest level in four months
against a basket of major currencies as traders' concerns about
taper talk in U.S. Federal Reserve minutes faded.
Canadian house prices will rise sharply in 2021, supported
by ultra-low interest rates and robust demand driven by massive
fiscal support, according to a Reuters poll of analysts.
On Thursday, the Bank of Canada said Canada's housing market
and high household debt levels had left the economy more
vulnerable to economic shocks.
Canadian government bond yields were little changed, with
the 10-year trading at 1.542% in a shortened session
ahead of the Victoria Day holiday on Monday.
(Reporting by Fergal Smith; editing by Jonathan Oatis)
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