CANADA FX DEBT-C$ stronger, tracking other commodity currencies

* C$ at C$1.0232 vs US$, or 97.73 U.S. cents
    * Retail sales rise by 1 pct but volumes flat
    * C$ seen trading between C$1.0200 and C$1.0250
    * C$ touches weakest level against AUD in more than a year
    * Bond prices rise across curve

    By Solarina Ho
    TORONTO, March 21 (Reuters) - The Canadian dollar was firmer
against the U.S. dollar on Thursday, helped in part by a
surprisingly strong reading of economic growth out of New
Zealand, while Canadian retail sales tempered gains.
    Retail sales were weaker than the initial headline
indicated, analysts said, noting that while sales climbed by 1
percent in January, that followed a revised 2.3 percent drop in
December. Volumes, used for calculating real GDP growth, were
    The currency's commodities cousins, the Australian and New
Zealand dollars, were both stronger overnight, with Australia
also firmer on a surprisingly upbeat report on manufacturing in
China, Australia's biggest export market.  
    "Risk held up okay overnight. (New Zealand's GDP) was
helpful. The kiwi dollar was the strongest performer overnight.
It seems to be helping most of the commodities-based currencies
as well and Canada's coming along for the ride," said Mark
Chandler, head of Canadian fixed income and currency strategy at
Royal Bank of Canada.
    "Our own data really, even though it looks good on the
surface, the guts to the report aren't that encouraging."
    At 9:08 a.m. (1308 GMT), the currency was trading at
C$1.0232 versus the U.S. dollar, or 97.73 U.S. cents. This was
stronger than its North American session close at C$1.0254, or
97.52 U.S. cents. Earlier in the session, it touched C$1.0199,
or 98.05 U.S. cents.
    Canada's performance was mixed against other major
currencies. It was stronger than the euro, but weaker
than the Japanese yen. It touched its weakest level
against the Australian dollar in more than a year.
    In other data, the number of Americans filing new claims for
jobless benefits edged higher last week, but a trend reading
dropped to its lowest in five years and pointed to ongoing
healing in the labor market. 
    Canada's dollar was expected to trade between C$1.0200 and
C$1.0250 for the day, according to RBC.
    The market is also awaiting Canada's federal budget, due at
4:00 p.m.
    Canadian government bonds were higher across the curve, with
the two-year bond up 1.5 Canadian cents to yield
0.983 percent, while the benchmark 10-year bond 
climbed 26 Canadian cents to yield 1.835 percent.