* Canadian dollar weakens 0.2% against the greenback * Teranet data shows home prices rising 2.7% in June from May * Price of U.S. oil falls 1.8% * Canadian 10-year yield eases 2.9 basis points to 1.118% TORONTO, July 20 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Tuesday as worries that the spread of the Delta coronavirus variant could impede global economic recovery helped to underpin the safe-haven greenback and pressured oil prices. Canada is a major producer of oil, which slumped to its lowest level in nearly two months on concern that rising COVID-19 infections could cause demand to weaken again just when OPEC+ has decided to increase supply. U.S. crude prices were down 1.8% at $65.21 a barrel, while the U.S. dollar gained ground against a basket of major currencies. The Canadian dollar weakened 0.2% to 1.2772 to the greenback, or 78.30 U.S. cents, after trading in a range of 1.2733 to 1.2786. On Monday, it touched a five-month low at 1.2807. In domestic data, the Teranet-National Bank Composite House Price Index rose 2.7% in June from May, with the pace of annual gains accelerating to a record level of 16%. The Canadian retail sales report for May is due on Friday, which can guide expectations for the Bank of Canada policy outlook. Last week, the central bank took a mostly optimistic stance on the country"s economy, saying the threat of the COVID-19 pandemic had largely passed while warning inflation would remain hot in the near-term. Canadian government bond yields fell across much of a flatter curve, tracking the move in U.S. Treasuries. The 10-year was down 2.9 basis points at 1.118%, after touching on Monday its lowest intraday level in five months at 1.097%. (Reporting by Fergal Smith; editing by Barbara Lewis) Our Standards: The Thomson Reuters Trust Principles.