CANADA FX DEBT-Canadian dollar adds to multi-month rally as oil prices climb

    * Canadian dollar rises 0.1% against the greenback
    * Loonie touches its strongest level since Jan. 8 at 1.2994
    * Price of U.S. oil increases 1.1%
    * Canadian bond yields rise across much of the curve

    TORONTO, Sept 1 (Reuters) - The Canadian dollar strengthened
to a near eight-month high against its U.S. counterpart on
Tuesday as the price of oil, one of Canada's major exports, rose
and the prospect of an extended period of low interest rates
weighed on the greenback.
    The U.S. dollar        fell against a basket of major
currencies as investors bet that a move by the Federal Reserve
to a policy of average inflation targeting would lead to
interest rates staying lower for longer.             
    U.S. crude oil futures        were up 1.1% at $43.06 a
barrel as data in China and Europe showed manufacturing demand
rebounding from coronavirus-induced lows.             
    The Canadian dollar        was trading 0.1% higher at 1.3032
to the greenback, or 76.73 U.S. cents. The currency touched its
strongest intraday level since Jan. 8 at 1.2994.
    In August, the loonie notched its biggest monthly advance
since June 2019, ending 2.8% higher. It was the fifth straight
month the loonie has gained ground, which is its longest winning
streak since 2014.
    Canada's statistical agency is paying close attention to the
"pot of cash" that Canadians have saved up amid the COVID-19
pandemic as it looks to understand who is saving and how that
money may contribute to the shape of the economic recovery.
    Clues as to the strength of the recovery could also come
from Canada's jobs report for August, which is due on Friday.
    Canadian government bond yields were higher across much of
the curve on Tuesday, with the 10-year             up 1.6 basis
points at 0.640%. Last Friday, the 10-year yield touched its
highest intraday in nearly three months at 0.697%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)