* C$ at C$1.0343 vs US$ or 96.68 U.S. cents * Core U.S. retail sales climb at fastest pace in 7 months * Bond prices mostly lower across curve By Solarina Ho TORONTO, Aug 13 (Reuters) - The Canadian dollar softened to session lows on Tuesday against its U.S. counterpart, which strengthened in part on positive U.S. retail sales, but overall trading was subdued. Core U.S. retail sales rose 0.5 percent in July at its fastest pace in seven months, a sign of quicker economic growth that could strengthen the case for the U.S. Federal Reserve to scale back its stimulus program. The core gauge excludes sales of cars, gasoline and building materials Other data on Tuesday showed U.S. small business optimism improving in July, while import prices rose less than expected during the month. The Canadian dollar's moves were limited, however, with little domestic data to drive direction until manufacturing sales on Friday. "It's the late summer doldrums ... It's pretty benign for now," said Don Mikolich, executive director, foreign exchange sales at CIBC, adding that markets are waiting for clear signals about what the Fed might do. "Canada's going to take its cues from those sorts of developments." The Canadian dollar was trading at C$1.0343 versus the U.S. dollar, or 96.68 U.S. cents. This was weaker than Monday's North American finish at C$1.0303, or 97.06 U.S. cents. The currency is expected to trade between C$1.0300 and C$1.0350 on Monday, according to RBC Capital Markets. Market action is expected to pick up towards the end of the month with the release of Canadian inflation, retail sales and economic growth data. "I think by the end of the month, we'll have a bit of a picture of whether the economy here is still sputtering, or whether we'll see a little bit of trend growth," said Mikolich. Prices of Canadian government debt were mostly lower across the maturity curve. The two-year bond lost 5.5 Canadian cents to yield 1.177 percent, and the benchmark 10-year bond fell 57 Canadian cents to yield 2.605 percent.