* Canadian dollar strengthens 0.8% against the greenback * Touches strongest since last Friday at 1.2650 * Canadian retail sales dip 0.6% in July * Canadian bond yields rise across a steeper curve TORONTO, Sept 23 (Reuters) - The Canadian dollar on Thursday strengthened by the most in one month against the greenback as equity markets globally added to their previous day"s gains and domestic data showed that retail sales fell less than expected in July. Canadian retail sales dipped 0.6% in July, beating expectations for a decline of 1.2%, while a preliminary estimate showed sales rebounding 2.1% in August. World markets rallied after the U.S. Federal Reserve confirmed plans to start reeling in stimulus and shares of troubled property developer China Evergrande leapt ahead of a crucial debt payment. A fresh injection of cash by China into its financial system helped to reassure investors. The Canadian dollar was trading 0.8% higher at 1.2665 to the greenback, or 78.96 U.S. cents, its biggest gain since Aug. 23. The currency touched its strongest level since last Friday at 1.2650. Gains for the loonie came as the U.S. dollar lost ground against a basket of major currencies, pulling back from one-month highs. The price of oil, one of Canada"s major exports, was supported by growing fuel demand and a draw in U.S. crude inventories as production remained hampered in the Gulf of Mexico after two hurricanes. U.S. crude prices were up 0.1% at $72.28 a barrel. Canadian government bond yields were higher across a steeper curve, with the 10-year up 7.2 basis points at 1.286%. The gap between the Canadian 10-year rate and its U.S. equivalent narrowed by 3.8 basis points to 7.9 basis points in favor of the U.S. bond, the smallest gap since Aug. 11. (Reporting by Fergal Smith, Editing by Nick Zieminski)