CANADA FX DEBT-C$ retreats from near 1-week high ahead of inflation data

 (Adds strategist quotes and details on activity; updates
    * Canadian dollar at C$1.2798, or 78.14 U.S. cents
    * Bond prices fall across steeper yield curve
    * 10-year yield touches a four-year high at 2.537 percent

    By Fergal Smith
    TORONTO, May 17 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Thursday, pulling back from a
near one-week high as investors turned attention to domestic
inflation and retail sales data due on Friday.
    At 4 p.m. EDT (2000 GMT), the Canadian dollar          was
trading 0.1 percent lower at C$1.2798 to the greenback, or 78.14
U.S. cents. The currency touched its strongest since May 11 at
    "We haven't done anything too significant here," said Amo
Sahota, director at Klarity FX in San Francisco. "We're getting
ready for tomorrow morning's main event."
    Canada's inflation report for April and March retail sales
data could help guide expectations for further interest rate
hikes from the Bank of Canada. The central bank has raised its
benchmark rate three times since July to leave it at 1.25
    "They are two very important numbers for Canada," Sahota
    On Wednesday, Bank of Canada Deputy Governor Lawrence
Schembri said uncertainty about the North American Free Trade
Agreement (NAFTA) renegotiations is one of the reasons the
central bank has kept interest rates low.                  
    Canadian Prime Minister Justin Trudeau said on Thursday he
felt "positive" about talks to rework NAFTA, while a top Mexican
official held out hope a deal could be hammered out by the end
of May.             
    U.S. officials say the negotiations need to wrap up very
soon to give the current Congress time to vote on a final text
for a revamped trade pact.
    U.S. crude oil futures        pulled back from an earlier
3-1/2-year high to settle flat at $71.49 a barrel. Oil is one of
Canada's major exports.    
    Foreign investment in Canadian securities picked up in March
as investors purchased money market instruments, even as they
reduced their bond holdings for a fourth consecutive month,
Statistics Canada said.             
    Canada added 30,200 jobs in April, led by hiring in
professional and business services, trade, and manufacturing,
according to a report from ADP.             
    Canadian government bond prices were lower across a steeper
yield curve, with the two-year            down 1 Canadian cent
to yield 2.064 percent and the 10-year             falling 16
Canadian cents to yield 2.520 percent.
    The 10-year yield touched its highest intraday level since
April 2014 at 2.537 percent.

 (Reporting by Fergal Smith; editing by Jonathan Oatis and James