CANADA FX DEBT-C$ reverses from four-week high as oil prices slide

 (Adds strategist quotes and details throughout; updates prices)
    * Loonie falls 0.2% against the greenback
    * Canadian retail sales rise by 1.1% in March
    * Price of U.S. oil decreases 2.7%
    * Canadian bond prices rise across a flatter yield curve

    By Fergal Smith
    TORONTO, May 22 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday, pulling back from an
earlier four-week high as a drop in oil prices offset domestic
data showing a jump in retail sales.
    At 4:36 p.m. EDT (2036 GMT), the Canadian dollar         
was trading 0.2% lower at 1.3430 to the greenback, or 74.46 U.S.
cents. Earlier in the session, the loonie touched its strongest
level since April 23 at 1.3358.    
    External factors, such as risk aversion and lower oil
prices, sparked the reversal lower for the Canadian dollar, said
Shaun Osborne, chief currency strategist at Scotiabank.
    The price of oil, one of Canada's major exports, fell as an
unexpected build in U.S. crude inventories compounded investor
worries that a trade fight between Washington and Beijing could
dent crude demand over the long haul. U.S. crude oil futures
       settled 2.7% lower at $61.42 a barrel.             
    Meanwhile, Canadian retail sales grew by 1.1% in March from
February, due largely to higher sales at gasoline stations,
Statistics Canada said. Sales volumes were more subdued, rising
    The data "supports the idea that Q1 (first quarter) growth
is still looking pretty decent, certainly relative to where the
(central) bank expected the economy to be," Osborne said.
    The Bank of Canada, which will make an interest rate
decision next week, has projected that the economy barely grew
in the first quarter of the year. Chances of an interest rate
cut this year have slumped to less than 20% from about 70% after
the last rate decision in April, data from the overnight index
swaps market indicated.           
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           rose 3.5 Canadian cents to yield 1.666% and the
10-year             was up 39 Canadian cents to yield 1.720%.
    On Tuesday, the 10-year yield touched its highest intraday
since May 3 at 1.764%.    
    Prime Minister Justin Trudeau said Canada would spend an
estimated C$15.7 billion to renew its coast guard fleet and that
it would partner with a new shipyard to complete the project.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)