CANADA FX DEBT-Canadian dollar dips as retail sales miss estimates

    * Canadian dollar weakens 0.1% against the greenback
    * Canadian retail sales were unchanged in March 
    * Price of U.S. oil rises 0.8%
    * Canadian bond yields ease across steeper curve

    TORONTO, May 26 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Thursday as a move higher in oil
prices was offset by domestic data showing that retail sales
growth stalled in March, but the currency stuck to its recent
sideways trading pattern.
    Canadian retail sales were unchanged in March from February,
missing estimates for a 1.4% advance, as lower sales at motor
vehicle and parts dealers offset gains in all other subsectors,
data from Statistics Canada showed.             
    A preliminary estimate showed that sales grew 0.8% in April.
    The price of oil, one of Canada's major exports, extended a
cautious rally this week on signs of tight supply while the
European Union wrangles with Hungary over plans to ban imports
from Russia.             
    U.S. crude        prices were up 0.8% at $111.18 a barrel,
while world stock markets          broadly stabilized and bond
yields eased as no hawkish surprises from the latest U.S.
Federal Reserve minutes helped soothe immediate worries over the
impact of rate hikes on economic growth.             
    The Canadian dollar        was trading 0.1% lower at 1.2825
to the greenback, or 77.97 U.S. cents, toward the middle of its
range over the last week or so which was between 1.2762 and
    The Bank of Canada will hike its overnight rate by half a
percentage point next Wednesday, according to all 30 economists
polled by Reuters, who see interest rates at least a half-point
higher by year-end than predicted just one month ago.
    Canadian government bond yields eased across a steeper
curve. The 2-year            fell 4.1 basis points to 2.500%,
its lowest since April 28, and the 10-year             was down
0.9 basis points at 2.765%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)