CANADA FX DEBT-C$ falls on soft U.S. retail sales report

 * C$ falls to 96.48 U.S. cents

 * U.S. retail sales had risen for seven straight months

 * Bond prices rise following a slump in recent days

 TORONTO, June 11 (Reuters) - Canada's dollar fell against
the greenback on Friday after a weaker-than-expected retail
sales report out of the United States, which consumes around
three quarters of Canadian exports.

 U.S. retail sales, which had risen for seven straight
months, unexpectedly fell in May due to a record slump in
building materials purchases, added to fears the economic
recovery was losing some steam. [ID:nN11109609]

 Total retail sales dropped 1.2 percent, versus forecasts of
0.2 percent growth.

 "The soft U.S. retail sales report might flag a softening
of Canadian exports to the U.S., if the U.S. consumer is indeed
flagging," said Sal Guatieri, a senior economist at the BMO
Capital Markets.

 At 9.06 a.m., The Canadian dollar was at C$1.0365 to the
U.S. dollar, or 96.48 U.S. cents, compared with Thursday's
North American finish of C$1.0312 to the U.S. dollar, or 96.97
U.S. cents.

 The price of U.S. crude oil tumbled after the retail sales
report from the world's No. 1 energy user, to below $74 a
barrel from the $75 mark. [O/R]

 Canada is the biggest oil supplier to the United States,
and its currency is often influenced by moves in it, as well as
other commodities that Canada produces.

 CANADIAN BONDS EXTEND GAINS

 Canadian bond prices extended gains across the curve after
the U.S. data. Prices had fallen in recent days as investor
became less risk averse.

 The two-year government bond CA2YT=RR rose 3 Canadian
cents to yield 1.804 percent, while the 10-year bond
CA10YT=RR rose 40 Canadian cents to yield 3.387 percent.
 (Editing by Jeffrey Hodgson)