CANADA FX DEBT-C$ softens in quiet trade after weak retail data

* C$ at C$0.9972 vs US$, or $1.0028
    * Canada retail sales weaker than forecast
    * China HSBC PMI indicates pace of growth increase
    * U.S. markets closed for Thanksgiving

    By Alastair Sharp
    TORONTO, Nov 22 (Reuters) - The Canadian dollar weakened
marginally against the U.S. currency on Thursday after domestic
retail sales data came in weaker than forecast, but overall
trading was quiet due to the U.S. Thanksgiving holiday.
    Canadian retail sales edged up by a less-than-expected 0.1
percent in September from August, after July's 0.3 percent
boost, Statistics Canada said. 
    "Another disappointment clearly ... It really reflects a
Canadian household that's pulling back, slowing their rate of
borrowing, and in many cases looking for good deals across
border, taking advantage of the high Canadian dollar," said Sal
Guatieri, senior economist at BMO Capital Markets.
    The Canadian dollar ended the quiet trading day at
C$0.9972 to the U.S. dollar, or $1.0028. This was slightly
weaker than Wednesday's North American close at C$0.9965, or
    "The backdrop is still somewhat challenging," said Shaun
Osborne, chief currency strategist at TD Securities. 
    But with the United States' broad S&P 500 index back above
its 200-day moving average, Osborne said he saw a chance for the
Canadian currency to bounce back as the year-end approaches.
"Maybe we're looking at perhaps something of a Santa Claus rally
after all."
    Tempering the softer sentiment was HSBC's preliminary
Chinese manufacturing survey. It showed expansion of the
country's vast manufacturing sector was accelerating in November
for the first time in 13 months, a sign that economic growth has
revived after seven consecutive quarters of slowdown.
    "That's kind of put a small risk-on tone to the market. Even
though the U.S. is not around," said David Bradley, director of
foreign exchange trading at Scotiabank, who added Canada's
dollar was likely to remain in a narrow trading range.
    The Canadian dollar was weaker against all major currencies,
while prices for Canadian government debt were mixed. 
    The two-year bond added 1 Canadian cent to yield
1.110 percent and the benchmark 10-year bond slipped
8 Canadian cents to yield 1.771 percent.