CANADA FX DEBT-C$ retreats after weak U.S. data drags on markets

* C$ at C$1.0138 vs US$, or 98.64 U.S. cents
    * U.S. retail sales fall unexpectedly in March
    * Bank of Canada rate decision set for Wednesday
    * CPI, manufacturing, housing data also in focus next week
    * Bond prices rise across the curve

    By Solarina Ho
    TORONTO, April 12 (Reuters) - The Canadian dollar weakened
against the U.S. dollar on Friday, a day after putting in its
strongest performance in nearly two months, as disappointing
U.S. data signaled flagging momentum in Canada's largest export
    Canadian and global equity markets and commodities also sold
off after a dour reading of U.S. consumer sentiment and poor
retail sales.
    Canadian gold-mining shares were hit especially hard as the
price of gold fell below $1,500 to its lowest levels
since July 2011, hurt by a draft plan for Cyprus to sell gold
reserves as part of its bailout by international lenders.
     "Weak data out of the U.S. weighed on pretty much all
assets. You're seeing commodities in particular get hit pretty
hard. Gold is down pretty meaningfully today," said Benjamin
Reitzes, senior economist and foreign exchange strategist at BMO
Capital Markets. 
    "That's definitely not helping the Canadian dollar's cause."
     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. 
    The Canadian dollar finished the week at C$1.0138
versus the U.S. dollar, or 98.64 U.S. cents, softer than
Thursday's close of C$1.0107, or 98.94 U.S. cents.
    "The U.S. (retail) numbers tend to reflect a trend that
we've seen before ... whereby we see the data through spring
tend to disappoint," said Shaun Osborne, chief currency
strategist at TD Securities.
    "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."
    The Canadian currency mostly underperformed against other
major currencies, including the Japanese yen. Earlier
in the week, it had touched its strongest level against the yen
in about 4-1/2 years.
    There is potentially market-moving data from both sides of
the border next week, including manufacturing sales, U.S. and
Canadian consumer price index data, and housing statistics.
    The Bank of Canada's next interest-rate decision and
monetary policy report will come on Wednesday. 
    The price of Canadian government debt was higher across the
curve, with the two-year bond climbing 6 Canadian
cents to yield 0.950 percent and the benchmark 10-year bond
 rising 43 Canadian cents to yield 1.738 percent.