CANADA FX DEBT-C$ drops to six-month low on weak data, dovish central bank

* Canadian dollar at C$1.1113 or 89.98 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Solarina Ho
    TORONTO, Sept 24 (Reuters) - The Canadian dollar extended
losses against the greenback on Wednesday, hitting its weakest
level in six months as a dovish central bank and Tuesday's
report of weaker-than-expected retail sales figures for July
gave the currency a languid tone.
    The Bank of Canada's policy stance has looked dovish in
recent commentary. It has noted that stronger inflation over the
past half year has been due to one-off factors and it has
estimated that the rate at which the economy can work at full
capacity with stable inflation is lower than it has been
    "We've been one of the weaker performing currencies over the
past number of sessions. Obviously yesterday's retail sales data
was very disappointing," said Don Mikolich, executive director,
foreign exchange sales, at CIBC World Markets.    
    "In the absence of any strong economic results to come this
week, and that continued tone from the Bank of Canada, Canada
seems to be losing a little bit of ground. Weak commodity prices
are also not helping at this stage either."
    After six months of gains, Canadian retail sales
unexpectedly fell 0.1 percent in July from June's record level.
    The Canadian dollar was weaker for a fourth straight session
on Wednesday, breaking through C$1.11, or 90 U.S. cents, a key
resistance level.
    At 9:27 a.m. (1327 GMT), the Canadian dollar was
trading at C$1.1113 to the greenback, or 89.98 U.S. cents, its
weakest level since March 26, and lower than Tuesday's close at
C$1.1069, or 90.34 U.S. cents.
    The next level to watch for would be a break through
C$1.1150 and C$1.12, said Mikolich, who did not expect it to
weaken beyond that in the near term.
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year down 2 Canadian
cents to yield 1.131 percent and the benchmark 10-year
 falling 6 Canadian cents to yield 2.177 percent.

 (Reporting by Solarina Ho; Editing by Peter Galloway)