CANADA FX DEBT-C$ retreats from 7-month high as inflation cools, greenback rallies

 (Adds quotes and details throughout; updates prices)
    * Canadian dollar falls 0.3% against the greenback
    * Annual inflation rate in July falls to 0.1%
    * Canada's wholesale trade increases by a record 18.5% in
    * Canadian bond yields rise across a steeper curve

    By Fergal Smith
    TORONTO, Aug 19 (Reuters) - The Canadian dollar fell against
its U.S. counterpart on Wednesday as the greenback broadly
rebounded and a cooling of domestic inflation supported
expectations for the Bank of Canada to leave interest rates near
zero until at least 2022.
    The loonie        weakened 0.3% to 1.3213 to the greenback,
or 75.68 U.S. cents, pulling back from its strongest intraday
level since Jan. 24 at 1.3131.
    Canada's annual inflation rate fell to 0.1% in July,
Statistics Canada said, which was less than the 0.5% rate that
analysts had expected.             
    The data supports "the BoC's very accommodative policy and
forward guidance," said Ryan Brecht, a senior economist at
Action Economics.
    Money markets see little chance that the Bank of Canada will
raise its benchmark interest rate, which sits at 0.25%, this
year or next. The central bank has expanded its balance sheet as
a share of GDP this year by more than the Federal Reserve.
    The U.S. dollar        rebounded from a two-year low against
a basket of major currencies after the release of minutes from
the Fed's last policy meeting that were not as dovish as some
investors anticipated.
    "The market expected signs that a dovish shift in forward
guidance from the Fed would occur soon," strategists at Action
Economics said.
    Separate data from Statistics Canada showed that Canadian
wholesale trade increased by a record 18.5% in June from May as
the economy reopened.             
    A staggered reopening from lockdowns, supported by fiscal
stimulus, is likely paying off for Canada's economy, with
activity forecast to rebound in the current quarter twice as
fast as in the United States, its biggest trading partner by
    Oil       , one of Canada's largest exports, settled 0.1%
lower at $42.93 a barrel.                         
    Canadian government bond yields rose across a steeper curve,
with the 10-year             up 1.8 basis points at 0.583%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski and Alistair Bell)