CANADA FX DEBT-C$ hits two-week low on growth fears

* C$ at C$0.9996 vs US$, or $1.0003
    * Lowest level since March 7
    * Canadian January retail sales come in below estimates
    * China, euro zone PMI data weighs
    * Bond prices higher across curve

    By Jon Cook	
    TORONTO, March 22 (Reuters) - The Canadian dollar hit a
two-week low against its U.S. counterpart o n T hursday after
disappointing domestic retail data added to global growth
concerns following weak Chinese and European manufacturing data.	
    Strong sales by motor vehicle and parts dealers in January
drove a 0.5 percent increase in Canadian retail sales over the
month, Statistics Canada said on Th ursday. But the data came in
below estimates from a Reuters poll of economists that predicted
a rise of 1.7 percent. 	
    "The weaker Canadian data suggests that we may see a bit
more (Canadian dollar) softness," said Shaun Osborne, chief
currency strategist at TD Securities.	
    The Canadian currency slid back above parity with the U.S.
dollar at $1.006 after the data was released. It was at C$0.9974
versus the U.S. dollar, or $1.0026, immediately before the
    At 9:50 a.m. (1350 GMT), the Canadian dollar stood
at C$0.9996 against the U.S. dollar, or $1.0003, down from
Wednesday's North American close at C$0.9923 versus the U.S.
dollar, or $1.0078. It was its lowest level since March 7.	
    The currency is down more than 1 percent against the
greenback so far this month.	
    Overnight, the HSBC flash Purchasing Managers' Index, the
earliest indicator of China's industrial activity, fell to 48.1
in March from February's four-month high of 49.6. Anything below
50 is viewed as a contraction. 	
    Earlier this month China cut its 2012 economic growth target
to an eight-year low of 7.5 percent. 	
    In Europe, powerhouses Germany and France both reported an
unexpected contraction in manufacturing. 	
    "Those that are commodities-related to China are suffering,"
said Jeremy Stretch, head of foreign exchange strategy at CIBC
World Markets in London. "With the euro under pressure as well
it's not helping equity sentiment, which is generally a catalyst
for a weaker Canadian dollar."	
    The weak manufacturing data also sent oil prices lower,
pressuring the Canadian currency, as Brent crude was set
for its lowest close in more than two weeks on Thursday. 	
    Canada's dollar still fared better than other
commodity-linked currencies, especially the Australian dollar
, which hit a two-month low versus the U.S. dollar of
    Losses were pared after U.S. data on Thursday showed initial
jobless claims fell 5,000 to a seasonally adjusted 348,000, the
lowest level since February 2008. 	
    "It suggests that the improvement that we've seen in terms
of these numbers recently has been sustained," said Osborne.	
    He added that the Canadian dollar would likely stay within a
range between its 200-day moving average near parity with the
U.S. currency and its 40-day moving average around C$0.9950.	
    A decline in risk appetite was reflected by higher Canadian
bond prices across the curve. The two-year bond was
up 7 Canadian cents to yield 1.249 percent, while the 10-year
bond rose 35 Canadian cents to yield 2.198 percent.