* Loonie trades in a range of 1.3989 to 1.4018

* Price of oil falls about 6% to three-month low

* Home sales rise 5.5% in May from April

* Bond yields ease across the curve

By Fergal Smith

TORONTO, June 16 (Reuters) - The Canadian dollar steadied

near a seven-month low against its U.S. counterpart on Tuesday

as oil prices fell and data showed domestic housing activity

picking up.

The loonie was trading nearly unchanged at 1.3995 per

U.S. dollar, or 71.45 U.S. cents, after moving in a range of

1.3989 to 1.4018. Last Thursday, the currency touched its

weakest level since November at 1.4023.

* The global price of oil, one of Canada's major exports,

fell about 6% to a three-month low on optimism that an interim

peace deal between the U.S. and Iran would allow oil to flow

through the vital Strait of Hormuz.

* "Oil prices coming off seem to be seen as a net negative

for the Canadian dollar," said Shaun Osborne, chief currency

strategist at Scotiabank. "But I think the real story is that we

had a pretty soft run of data in Canada in the past few weeks,

maybe overstating to some extent how weak the Canadian economy

really is in the early part of this year."

* The gap between Canadian and U.S. one-year swap rates has

widened by 34 basis points since May to 137 basis points in

favor of the U.S. rate.

* "Until that spread narrows, it's probably going to be a

bit of a tough slog for the Canadian dollar to do much other

than to track the general trend in the U.S. dollar and stay

relatively soft," Osborne said.

* Canadian home sales rose 5.5% in May from April, making up

some ground after a slow start to the typically active spring

market.

* The U.S. dollar edged lower against a basket of

major currencies as investors awaited the conclusion of the

Federal Reserve's policy meeting on Wednesday.

* Canadian bond yields moved lower across the curve as the

drop in oil prices reduced inflation risk globally. The 10-year

was down 3.3 basis points at 3.380%.