CANADA FX DEBT-C$ slightly weaker as Bank of Canada in focus
* Canadian dollar at C$1.2759 or 78.38 U.S. cents * Bond prices higher across the maturity curve TORONTO, July 14 (Reuters) - The Canadian dollar pared some of its session losses against the greenback on Tuesday after unexpectedly weak U.S. retail sales data for June sent the U.S. dollar into retreat, but the loonie remained a touch weaker overall ahead of the Bank of Canada's much-anticipated rate decision. With little on tap domestically until then, the Canadian dollar's moves have been dictated largely by the U.S. dollar and the price of crude oil, a major Canadian export. Markets are pricing in about a 47 percent chance the Bank of Canada will announce a 25 basis point rate cut for the second time this year. Some currency watchers warn, however, that if no cut is announced, there could be an aggressive unwinding of Canadian dollar shorts, though much will likely also depend on the dovishness of the Bank's tone. * At 9:13 a.m. EDT (1313 GMT), the Canadian dollar, weaker than most of its key currency counterparts, was trading at C$1.2759 to the greenback, or 78.38 U.S. cents, below the Bank of Canada's official close of C$1.2740, or 78.39 U.S. cents. * The currency briefly touched its strongest level of the session before scaling back. It hit C$1.2716 immediately after the U.S. data, while its weakest level was C$1.2805. * U.S. retail sales fell 0.3 percent to the weakest level since February, while May figures were revised down, raising some concerns the economy was slowing again. Economists polled by Reuters had predicted a rise of 0.2 percent. * U.S. import prices also slid unexpectedly last month, as the lingering effects of a strong U.S. dollar offset rising costs for petroleum products. * The Bank of Canada rate decision will be announced at 10:00 a.m. EDT on Wednesday. * The price of crude fell after Iran and six global powers reached a landmark nuclear deal that would see an easing of sanctions against Tehran and a gradual increase in the country's oil exports, though prices have recouped some of the heavier early losses. * U.S. crude prices were down 0.73 percent to $51.82, while Brent crude lost 1.12 percent to $57.2. * Canadian government bond prices were higher across the maturity curve, with the two-year price up 4.5 Canadian cents to yield 0.453 percent and the benchmark 10-year rising 28 Canadian cents to yield 1.658 percent. * The Canada-U.S. two-year bond spread was -18.8 basis points, while the 10-year spread was -75.3 basis points. (Reporting by Solarina Ho; Editing by Nick Zieminski)
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