* Loonie reverses after slipping to its weakest since March 11 * Flash estimate shows Canadian factory sales falling in February * Oil up after Suez Canal ship grounding * Canadian bond yields little changed across the curve (Updates prices, adds analyst comment) By Saqib Iqbal Ahmed and Fergal Smith March 24 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Wednesday as oil rallied, helping the currency pare some recent losses that pushed it to a near two-week low earlier in the session. Oil prices jumped about 6% on Wednesday after a ship ran aground in the Suez Canal, and worries that the incident could tie up crude shipments gave prices a boost after a slide over the past week. Oil is one of Canada"s major exports. "Until the container ship that ran aground in the Suez Canal can be cleared, Mid-East oil exports will slow significantly, which will keep oil prices firm for the time being, and continue to weigh on USD-CAD," said Ronald Simpson, managing director, global currency analysis at Action Economics. The Canadian dollar was trading up about 0.2% at 1.2562 to the greenback, or 79.61 U.S. cents. The currency earlier touched its weakest level since March 11 at $1.2608. Canadian manufacturing sales in February likely dropped 1.0% as spending on the transportation equipment industry declined, Statistics Canada said in a flash estimate. The Bank of Canada is seeing evidence of investor activity in some Canadian housing markets and is concerned that "fear of missing out" may also be driving price gains, Deputy Governor Toni Gravelle told Reuters on Tuesday. Canadian government bond yields were little changed across the curve, with the 10-year trading at about 1.482%, not far from the 14-month high of 1.677%. touched last Thursday. (Reporting by Saqib Iqbal Ahmed and Fergal Smith; Editing by Chizu Nomiyama and Peter Cooney)