CANADA FX DEBT-C$ softens in quiet trade after weak retail data

* C$ at C$0.9974 vs US$, or $1.0026
    * Canada retail sales weaker than forecast
    * China HSBC PMI indicates pace of growth increase
    * U.S. markets closed for Thanksgiving

    By Solarina Ho
    TORONTO, Nov 22 (Reuters) - The Canadian dollar softened
against the U.S. currency on Thursday after domestic retail
sales data came in weaker than forecast, but overall trading was
quiet due to the U.S. Thanksgiving holiday.
    Canadian retail sales edged up by a less-than-expected 0.1
percent in September from August, after July's 0.3 percent
boost, Statistics Canada said on Thursday. 
    "Another disappointment clearly ... It really reflects a
Canadian household that's pulling back, slowing their rate of
borrowing, and in many cases looking for good deals across
border, taking advantage of the high Canadian dollar," said Sal
Guatieri, senior economist at BMO Capital Markets.
    "The (Canadian dollar) weakness is consistent with the
softer than expected retail sales report."
    At 9:00 a.m. (1400 GMT), the Canadian dollar was
trading at C$0.9974 to the U.S. dollar, or $1.0026. This was
slightly higher than Wednesday's North American close at
C$0.9965, or $1.0035.
    Tempering the softer sentiment was HSBC's preliminary
Chinese manufacturing survey which showed expansion of the
country's vast manufacturing sector was accelerating in November
for the first time in 13 months, a sign that the pace of
economic growth has revived after seven consecutive quarters of
    "That's kind of a put a small risk-on tone to the market.
Even though the U.S. is not around," said David Bradley,
director of foreign exchange trading at Scotiabank, who added
Canada's dollar was likely to remain in a narrow trading range.
    The Canadian dollar was weaker against all major currencies
except for the Japanese yen, which weakened to a 7-1/2 month low
against the Canadian currency. The yen was pressured by growing
speculation that the Bank of Japan would aggressively ease
monetary policy in coming months. 
    Prices for Canadian government debt were weaker across the 
curve, with the two-year bond off 1 Canadian cent to
yield 1.121 percent and the benchmark 10-year bond 
slipping 14 Canadian cents to yield 1.778 percent.