September 20, 2019 / 1:34 PM / a month ago

REFILE-CANADA FX DEBT-Canadian dollar weakens after lackluster retail sales gain

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    * Canadian dollar falls 0.2% against the greenback
    * Canadian retail sales rise 0.4% in July
    * Price of U.S. oil increases 1.5%
    * Canadian bond prices rise across a flatter yield curve

    By Fergal Smith
    TORONTO, Sept 20 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday as the greenback broadly
climbed and domestic data showed that retail sales rose less
than expected in July.
    Canadian retail sales were up 0.4% in July from June,
advancing for the first time in three months, on stronger sales
of new cars at motor vehicle and parts dealers, Statistics
Canada said. Analysts had forecast a 0.6% increase in overall
sales.             
    "This so-so reading was flattered by a rebound in auto sales
and firmer prices," Doug Porter, chief economist at BMO Capital
Markets, said in a note.
    "The relatively flat performance by the consumer at the
start of Q3 reinforces the view that overall GDP will simmer
down markedly in the quarter after the blow-out 3.7% jump in
Q2," Porter said.
    Canadians have high debt loads and depleted savings, which
could crimp their spending for as long as decades, economists
say.             
    The U.S. dollar        rose against a basket of major
currencies after investors cut back short positions in the
greenback as concerns about slower global growth prospects and
political tensions boosted its safe-haven appeal.             
    At 9:28 a.m. (1328 GMT), the Canadian dollar          was
trading 0.2% lower at 1.3285 to the greenback, or 75.27 U.S.
cents. The currency, which touched on Wednesday a two-week low
intraday at 1.3310, traded in a range of 1.3256 to 1.3294.
    For the week, the loonie was nearly unchanged.
    The price of oil, one of Canada's major exports, was
supported by rising Middle East tensions after a key Saudi
Arabian supply hub was knocked out in an attack last weekend.
U.S. crude oil futures        were up 1.50% at $59 a barrel.
            
    Canadian government bond prices were higher across a flatter
yield curve, with the two-year            up 2 Canadian cents to
yield 1.59% and the 10-year             rising 27 Canadian cents
to yield 1.408%.
    On Thursday, the 10-year yield hit a one-week low at 1.402%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski and David Evans)
  
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