* C$ rebounds to 96.48 U.S. cents
* Bonds mixed as equity markets make gains
* U.S. retail sales tepid, inflation at 40-year low (Adds details)
By Ka Yan Ng
OTTAWA, Aug 13 (Reuters) - The Canadian dollar rebounded against the greenback on Friday morning after being pulled down early in the day by the initial reaction to U.S. July data for inflation and retail sales.
The currency CAD=D4 slid to C$1.0440 to the U.S. dollar, or 95.79 U.S. cents, as the U.S. dollar rose after the release of figures that showed U.S. retail sales and consumer prices rose in July. But the U.S. dollar then fell back against the Canadian currency because the data was "not enough to derail anybody's view" on the fragile state of the economy, said Jack Spitz, managing director of foreign exchange at National Bank Financial.
Higher energy costs helped lift U.S. consumer prices, the first rise in four months, in a report that could ease concerns about deflation. [ID:nN13179718]
The rise in U.S. retail sales was concentrated in auto and gasoline station sales, suggesting underlying momentum in consumer spending remains tame. A separate report showed U.S. consumer sentiment inched up in early August from July. [ID:nN12179325] [ID:nN13177086]
By 10:40 a.m. (1440 GMT), the Canadian currency had recovered to C$1.0365 to the U.S. dollar, or 96.48 U.S. cents, up from Thursday's finish at C$1.0428 to the U.S. dollar, or 95.90 U.S. cents.
Aside from the U.S. data, the day's influences could come from equity market movements, while the day's range has likely already been established, Spitz said.
"It's unlikely to trade through C$1.0360 today, but momentum can be a game changer as we've seen over the last number of sessions," he said.
"All in all, it's likely to hold between C$1.0360 and C$1.0440 ... but again, unless there's a huge move up or down in equities, we're unlikely to probe through either end of that range."
Canadian bond prices were up but off highs in long-dated issues, and weaker in short-dated maturities, after the U.S. consumer confidence data was a bit above expectations.
Moderate gains in equity markets also took favor away from an earlier safe-haven bid to debt.
The two-year bond CA2YT=RR was down 5 Canadian cents to yield 1.383 percent, while the 10-year bond CA10YT=RR was up 1 Canadian cent to yield 3.011 percent. (Reporting by Ka Yan Ng; editing by Peter Galloway)