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* Canadian dollar rises 0.1% against the greenback
* Loonie touches its strongest since May 10 at 1.3401
* Canadian factory sales rise 2.1% in March
* Canadian bond prices fall across the yield curve
TORONTO, May 16 (Reuters) - The Canadian dollar rose to a nearly one-week high against its U.S. counterpart on Thursday as oil prices climbed and domestic factory data showed strengthening in the economy. Canadian factory sales were up by 2.1% in March from February on higher motor vehicle sales, as well as petroleum and coal products, Statistics Canada said. Analysts surveyed by Reuters had forecast a 1.1% increase in the value of shipments. "Today's reading suggests a likely healthy advance in March monthly GDP, and will support the street's view that growth will outperform the Bank of Canada's pessimistic view for Q1," said Royce Mendes, senior economist at CIBC Capital Markets in a note. The central bank has projected the economy grew by 0.3% in the first three months of the year after barely any growth in the fourth quarter. Bank of Canada Governor Stephen Poloz and deputy governor Carolyn Wilkins will take media questions at 11:15 a.m. (1515 GMT), after the release of the central bank's review of the Canadian financial system. Canada added 61,700 jobs in April, the second straight month of robust jobs gains, led by hiring in the education and health services and construction sectors, according to a report from ADP. The price of oil, one of Canada's major exports, rose for a third day running as fears of supply disruption amid heightened tensions in the Middle East overshadowed swelling U.S. crude
inventories. U.S. crude oil futures were up 1.8% at
$63.12 a barrel.
At 9:57 a.m. (1357 GMT), the Canadian dollar was
trading 0.1% higher at 1.3420 to the greenback, or 74.52 U.S. cents. The currency touched its strongest since May 10 at 1.3401.
Gains for the loonie came even a the U.S. dollar rose
to its highest levels in a week against a basket of currencies. Investors focused on trade war tensions, while the euro was hurt elections. Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries after data showing stronger-than-expected U.S. housing starts in April.
The two-year fell 4.5 Canadian cents to yield1.606% and the 10-year was down 18 Canadian cents to
(Reporting by Fergal Smith Editing by Susan Thomas)