CANADA FX DEBT-C$ softens as US$ rallies on data hopes

* C$ at C$1.0304 vs US$, or 97.04 U.S. cents
    * US$ stronger on data expectations
    * Bond prices mixed

    By Solarina Ho
    TORONTO, Aug 12 (Reuters) - The Canadian dollar was
marginally softer on Monday against a rallying U.S. dollar,
which strengthened on expectations of positive U.S. data this
week that could prompt the Federal Reserve to make a decision on
its monetary policy. 
    With little market-moving Canadian data until manufacturing
sales on Friday, the Canadian dollar is expected to take its
cues from U.S. dollar moves.
    "This is just a day of more universal U.S. dollar strength,"
said David Tulk, chief Canada macro strategist at TD Securities.
    Tulk said U.S. retail sales and inflation data this week
will be key indicators for a market that is trying to gauge the
strength of the U.S. consumer heading into the second half of
the year.
    "We have the impression that the fiscal drag would be most
prominent in the first half. So we're trying to see, once we get
beyond that, what underlying momentum exists in the economy,"
said Tulk.
    The Canadian dollar, which was mostly outperforming
other key currencies, was trading steadily around C$1.0304
versus the greenback, or 97.04 U.S. cents at 9:21 a.m. (1321
GMT). This was marginally weaker than Friday's North American
close at C$1.0294, or 97.14 U.S. cents.
    TD Securities expects the currency to trade within the highs
and lows of today's session, between C$1.0280 and C$1.0317.
    U.S. retail sales data is expected on Tuesday while CPI data
is due on Thursday.
    Prices for Canadian government debt were mixed. The two-year
bond lost half a Canadian cent to yield 1.136
percent, and the benchmark 10-year bond rose 2
Canadian cents to yield 2.478 percent.