CANADA FX DEBT-C$ retreats after unexpected fall in Canadian retail sales
* Canadian dollar at C$1.2276 or 81.46 U.S. cents * Bond prices higher across the maturity curve By Solarina Ho TORONTO, June 19 (Reuters) - The Canadian dollar weakened against the greenback on Friday, hurt by data that showed an unexpected fall in retail sales in April. After two months of gains, retail sales fell 0.1 percent in April as consumers spent less at food and electronic stores. Economists had forecast a 0.7 percent rise from March. Sales in March were revised higher to a 0.9 percent rise from a 0.7 percent increase. The disappointing retail figures overshadowed a report that showed a slight uptick in Canada's annual inflation rate for May, which came in at 0.9 percent, but still far below the Bank of Canada's target range of 1 percent to 3 percent. Forecasters had expected the rate to stay at 0.8 percent. "When you take that in conjunction with some of the other data that we've seen this month in terms of manufacturing sales, goods trade data, the growth outlook for April doesn't look too supportive," said Bipan Rai, director of foreign exchange strategy at CIBC World Markets. Rai added, however, that the recent data was unlikely to prod the Bank of Canada to make a quick move on interest rates. At 9:28 a.m. EDT (1328 GMT), the Canadian dollar was at C$1.2276 to the greenback, or 81.46 U.S. cents, weaker than the Bank of Canada's official close on Thursday of C$1.2227, or 81.79 U.S. cents. At one point the currency hit C$1.2296, 81.33 U.S. cents. The loonie was already under some pressure before the retail sales figures were released, in part due to softer prices for crude oil, a key Canadian export. Oil slid on forecasts that U.S. shale oil output would keep growing this year. The U.S. crude price was down 1.80 percent at $59.36, while Brent crude lost 1.85 percent to $63.07. Canadian government bond prices were higher across the maturity curve, with the two-year up 5 Canadian cents to yield 0.597 percent, and the benchmark 10-year rising 52 Canadian cents to yield 1.738 percent. The Canada-U.S. two-year bond spread was -2.8 basis points, while the 10-year spread was -55.2 basis points. (Reporting by Solarina Ho; Editing by Peter Galloway)
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