CANADA FX DEBT-C$ hits 3-week low after weak domestic and U.S. data

 (Adds investor quotes and details on activity; updates prices)
    * Canadian dollar falls 0.3 percent against greenback
    * Loonie touches its weakest since Jan. 25 at 1.3340
    * Canadian factory sales drop 1.3 percent in December
    * Price of U.S. oil rises nearly one percent
    * Canadian bond prices rally across the yield curve

    By Fergal Smith
    TORONTO, Feb 14 (Reuters) - The Canadian dollar fell to its
lowest in nearly three weeks against the greenback on Thursday,
pressured by domestic data showing a surprise drop in factory
sales and U.S. data that upset hopes the global economy is
     U.S. retail sales recorded their biggest drop in more than
nine years in December as receipts fell across the board,
suggesting a sharp slowdown in economic activity at the end of
    "It seems to be at this point less about what's going on in
the Canadian domestic economy and more a focus on what is going
on in the global economy and by that I mean, retail sales today
out of the U.S. have raised concerns about the direction of the
U.S. economy," said Tim Alt, a portfolio manager at Aviva
    Canada, which sends about 75 percent of its exports to the
United States, is a major producer of commodities, including
oil. So its economy could be hurt by a slowdown in global
    Canadian factory sales fell by 1.3 percent in December from
November on lower petroleum and coal product sales, Statistics
Canada said. Analysts had forecast an increase of 0.2 percent.
    "The surprising fall in factory activity will take Q4 GDP
tracking forecasts below one percent," Royce Mendes, a senior
economist at CIBC Capital Markets said in a research comment.
    "Soft GDP prints to close out last year and begin this one
will keep the Bank of Canada on the sidelines for at least the
next few months," Mendes said.
    The Bank of Canada has projected that growth slowed
temporarily in the fourth quarter of 2018 and the first quarter
of this year due mainly to lower oil prices. Money markets see
chances of an interest rate hike this year at less than 20
    U.S. crude oil futures        settled nearly one percent
higher on Thursday at $54.41 a barrel. Still, oil has fallen
nearly 30 percent since October.
    At 4:09 p.m. (2109 GMT), the Canadian dollar          was
trading 0.3 percent lower at 1.3293 to the greenback, or 75.23
U.S. cents. The currency touched its weakest level since Jan. 25
at 1.3340.
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 8.5 Canadian cents to yield 1.768 percent and the 10-year
            climbed 47 Canadian cents to yield 1.880 percent.   

 (Reporting by Fergal Smith; Editing by Bernadette Baum and
Diane Craft)