CANADA FX DEBT-C$ weakest since July 2004 as retail data disappoints, oil falls

(Updates with strategist comment, closing figures, new details)
    * Canadian dollar at C$1.3347 or 74.92 U.S. cents
    * Bond prices lower across the maturity curve

    By Solarina Ho
    TORONTO, Sept 23 (Reuters) - The Canadian dollar touched its
weakest level in more than 11 years against the greenback on
Wednesday, following July domestic retail sales figures that
fell short of expectations and another plunge in volatile oil
    New car and clothing sales helped push Canadian retail sales
higher for the third month in a row in July, up 0.5 percent and
in line with economists polled by Reuters, but sales were flat
and below expectations when automotive figures were excluded.
Volumes were also weaker than the headline, while figures from
the previous month were revised lower. 
    "People had been thinking that we'd get a decent
contribution to the next quarter's GDP growth and show some
positive data," said Don Mikolich, executive director of foreign
exchange sales at CIBC World Markets, adding that the soft data
also underscored the interest rate differential between Canada
and the United States.
    "In a quiet week of data, that one sticks out as having a
bit of a negative sentiment around the economy here. (Oil's) the
other big driver."
    The loonie has plunged some 25 percent since last summer,
along side the price of crude, a key Canadian export, but had
been mostly rangebound over the last month after hitting a
previous 11-year low at C$1.3353 to greenback.
    The price of crude, a key Canadian export, reversed course
during the session to give up an earlier rally after large
gasoline builds raised concerns about high autumn fuel supplies.
    Brent, the global benchmark for oil, settled down
$1.33, or 2.7 percent, at $47.75 a barrel. U.S. crude 
slumped $1.88, or 4.1 percent, to settle at $44.48. 
    The Canadian dollar ended at C$1.3347 to the
greenback, or 74.92 U.S. cents, softer than the Bank of Canada's
official close of C$1.3258, or 75.43 U.S. cents on Tuesday.
    It stumbled to C$1.3357, or 74.87 U.S. cents just after
midday, its weakest intraday trading level since late July,
    Mikolich said the currency could soften to C$1.35, but
expects to see some fatigue as it approaches C$1.34.
    Overseas, the latest data out of China showed the country's
manufacturing sector had its biggest contraction since the
global financial crisis. The country's September factory PMI
figures intensified concerns that a slowdown in world's
second-largest economy could spread.  
    Canadian government bond prices were lower across the
maturity curve, with the two-year price down 4
Canadian cents to yield 0.519 percent and the benchmark 10-year
 off 9 Canadian cents to yield 1.489 percent.
    The Canada-U.S. two-year bond spread was -18.0 basis points,
while the 10-year spread was -66.4 basis points.

 (Reporting by Solarina Ho; Editing by Nick Zieminski and Diane