CANADA FX DEBT-C$ bolstered by positive U.S. retail sales data

* Canada dollar at C$0.9919 vs US dollar, or $1.0082
    * U.S. retail sales data boosts currency
    * Bond prices mostly lower
    * Focus on CPI and manufacturing sales data this week

    By Solarina Ho
    TORONTO, Aug 14 (Reuters) - The Canadian dollar strengthened
against the U.S. dollar on Tuesday, underpinned by
better-than-expected economic data south of the border.
    U.S. retail sales rose for the first time in four months,
growing by 0.8 percent in July and far exceeding the 0.3 percent
expectation among economists polled by Reuters. The results
sparked hope that consumers could fuel quicker economic growth
in the third quarter. 
    "It was modestly risk-on from better-than-expected
indicators," said Mark Chandler, head of Canadian fixed income
and currency strategy at RBC Capital Markets, noting that the
retail sales data -- which lifted expectations for oil demand --
was indirectly positive for oil-rich Canada. 
    The Canadian dollar closed at C$0.9919 versus the
greenback, or $1.0082, from C$0.9925, or $1.0076 at Monday's
close. It had strengthened to as much as C$0.9906, or $1.0095
earlier in the session, immediately after the retail sales data.
    "It's only one month's data in a fresh quarter, but this is
a pretty impressive U.S. retail sales print," Derek Holt, an
economist with Scotiabank, said in a research note.
    Ongoing concerns over the broader euro zone dampened news
that Germany's economy grew modestly during the second quarter,
while the overall euro zone economy narrowly avoided a recession
during the first half of 2012.
    The Canadian currency weakened overnight after the euro zone
data was released, touching a session low against the U.S.
dollar at C$0.9941, or $1.0060.
    Mazen Issa, macro strategist at TD Securities, expected the
Canadian dollar to stay within a tight range between C$0.9915
and C$0.9941 versus the greenback, pending the release of
Canadian and U.S. CPI data later this week. 
    Canadian manufacturing sales data, expected on Thursday,
will also be in focus.
    "We are actually a little bit worried about manufacturing
sales," said Chandler. "It's possible we could give back some of
the gains."
    Canadian bond prices were mostly lower. The two-year bond
 slipped 8.5 Canadian cents to yield 1.185 percent,
and the benchmark 10-year bond fell 50 Canadian
cents to yield 1.856 percent.