CANADA FX DEBT-C$ retreats as Bank of Canada in focus; factory sales drag

* Canadian dollar at C$1.2559, or 79.62 U.S. cents
    * Bond prices mixed across the maturity curve

    TORONTO, April 15 (Reuters) - The Canadian dollar softened
against a rebounding greenback on Wednesday ahead of the Bank of
Canada's latest rate decision and monetary policy report later
in the day.
    The loonie also weakened modestly because of data showing
Canadian manufacturing sales fell 1.7 percent to C$50.04 billion
in February, hurt by auto plant closures. Market analysts had
forecast an increase of 0.4 percent. 
    The Bank of Canada, which will hold a press conference at
11:15 a.m. EDT (1515 GMT) following the 10 a.m. rate
announcement, is widely expected to keep interest rates on hold
at 0.75 percent. Market participants want to hear how the
central bank may have changed its forecast for Canada's growth
as the effects of cheaper oil become clearer.
    The U.S. dollar rose after Tuesday's retreat on
disappointing U.S. retail sales data. The currency's impact on
the Canadian dollar outweighed a rise in crude prices.
    * At 9:00 a.m. EDT, the Canadian dollar was trading
at C$1.2559 to the greenback, or 79.62 U.S. cents, weaker than
the Bank of Canada's official close of C$1.2490, or 80.06 U.S.
cents on Tuesday.
    * The loonie has ranged from C$1.2570 to C$1.2477 overnight
and into the early North American session on Wednesday.
    * Data showed China's economy grew at its slowest pace in
six years, raising expectations that a rate cut and lower bank
reserve requirements are coming soon. The news also put some
pressure on commodities-linked currencies. 
    * U.S. crude prices were up 1.63 percent at $54.16,
while Brent crude added 1.37 percent to $59.23. 
    * RBC Capital Markets said it expected the Canadian dollar,
which was underperforming nearly all of its key currency
counterparts, to trade between C$1.2480 and C$1.2580 against the
U.S. dollar during the North American trading session on
    * Canadian government bond prices were mixed across the
maturity curve, with longer-term yields higher. The two-year
 price was up 1 Canadian cent to yield 0.507 percent
and the benchmark 10-year rose 11 Canadian cents to
yield 1.307 percent.
    * The Canada-U.S. two-year bond spread was -0.1, while the
10-year spread was -58.6.

 (Reporting by Solarina Ho; Editing by Lisa Von Ahn)