* C$ drops to session low after weak wholesale data * C$ hits C$1.0135 vs US$, weakest since July 2012 * Bond prices rise across curve By Andrea Hopkins TORONTO, Feb 19 (Reuters) - The Canadian dollar fell to its lowest since July against its U.S. counterpart on Tuesday as weak economic data and concerns about U.S. budget talks, the Canadian housing sector and energy prices weighed. The Canadian dollar declined to a session low of C$1.0135 versus the U.S. dollar, or 98.67 U.S. cents, after Canadian wholesale trade fell more sharply than expected in December and data showed foreigners reduced their holdings of Canadian securities. That brought the currency, already down from Friday's North American session close at C$1.0061 versus the U.S. dollar, or 99.39 U.S. cents, to its weakest point since July 26. Monday was a holiday in most of Canada and the United States. Camilla Sutton, chief currency strategist at Scotiabank in Toronto, said three negative factors were pushing the Canadian dollar lower in the short term, starting with U.S. budget worries that are once again on the horizon. "The threat of sequestration being triggered March 1 is weighing on the U.S. growth outlook, so that would be negative for (the Canadian dollar)," Sutton said. "The second (negative factor) is we seem to have a global focus on the Canadian housing sector and how that could potentially negatively impact GDP. "Thirdly, I think the ongoing focus on the energy sector in Canada, and how, even though the spread between Brent and Western Canadian Select is off its high, it's still elevated on a historical basis." While U.S. legislators temporarily averted a series of automatic spending cuts and tax hikes, the compromise on across-the-board spending cuts, known as sequestration, only postponed until March 1 a resolution to the congressional budget fight. The U.S. budget crisis typically raises fears that spending cuts and tax hikes will slow U.S. growth, which in turns hurts the economy in Canada, whose largest trading partner is the United States. Canada's slowing housing sector is also expected to weigh on economic growth as homebuilding and home buying cools from the red-hot levels of early last year. While many economists believe the sector will manage a soft landing, others fear a crash. Scotiabank's Sutton said the Canadian dollar should maintain a range between C$1.0080 and C$1.0160 on Tuesday. Canadian government bond prices rose across the curve, with the two-year bond up 2.5 Canadian cent to yield 1.120 percent and the benchmark 10-year bond rising 20 Canadian cents to yield 1.994 percent.