* C$ at C$1.0126 vs US$, or 98.76 U.S. cents * U.S. retail sales unexpectedly fall in March * TD sees C$ seen trading between C$1.0110 and C$1.0175 * Bond prices rise across the curve By Solarina Ho TORONTO, April 12 (Reuters) - The Canadian dollar was weaker against the U.S. dollar on Friday following its best performance in nearly two months on Thursday, after disappointing U.S. data signaled flagging momentum in Canada's largest export market. U.S. retail sales contracted in March for the second time in three months, falling 0.4 percent, which was below analysts' expectations of a flat month in sales. A separate report showed wholesale prices fell sharply last month due to lower gasoline costs. Shaun Osborne, chief currency strategist at TD Securities, said the currency moves on the data were "negligible" and the currency has been consolidating overall this week. "The U.S. numbers tend to reflect a trend that we've seen before ... whereby we see the data through spring tend to disappoint," said Osborne. "Worries about a soft patch start to perhaps percolate through the market. We think it is something we have to keep in mind over the course of the next few weeks here." At 9:19 a.m. (1419 GMT), the Canadian dollar was trading at C$1.0126 versus the U.S. dollar, or 98.76 U.S. cents, weaker than Thursday's close of C$1.0107, or 98.94 U.S. cents. It briefly weakened to a session low of C$1.0137, or 98.65 U.S. cents after the U.S. sales data. The currency's performance was mixed against other major currencies. It was stronger against the euro and also the New Zealand dollar after touching its weakest level since mid-2005. It was weaker than the Australian dollar and the Japanese yen. Against the yen, it had touched its firmest level in about 4-1/2 years earlier this week. For the session, the Canadian dollar was expected to trade between C$1.0110 and C$1.0175, said Osborne. "There's been a pretty decent correction in the Canadian dollar over the last two, three weeks. We're probably close to the Canadian sell levels again," he said, adding he's looking to buy U.S. dollars on dips below C$1.01. The price of Canadian government debt was higher across the curve, with the two-year bond climbing 3 Canadian cents to yield 0.965 percent and the benchmark 10-year bond rising 33 Canadian cents to yield 1.749 percent.