CANADA FX DEBT-Canadian dollar lags G10 peers as domestic retail sales disappoint

       * Canadian dollar rises 0.1% against the greenback
    * Canadian retail sales rise 0.4% in August
    * Annual inflation rate rises to 0.5% in September
    * Canadian bond yields move higher across a steeper curve

    By Fergal Smith
    TORONTO, Oct 21 (Reuters) - The Canadian dollar rose to a
six-week high against the greenback on Wednesday as investors
weighed U.S. stimulus prospects, but it gave back some of its
gain as domestic retail sales data suggested the pace of
economic recovery would slow.
    The Canadian dollar        was trading 0.1% higher at 1.3108
to the greenback, or 76.29 U.S. cents, which was the smallest
advance among G10 currencies. Earlier, the currency touched its
strongest level since Sept. 7 at 1.3081.
    Canadian retail sales rose by 0.4% in August from July,
missing analyst forecasts for a 1.1% increase, data from
Statistics Canada showed. A flash estimate showed no increase in
September.
    "I think it (the data) shows that some combination of waning
demand and supply side problems is leading to a pretty toppish
looking retail sector," said Derek Holt, vice president of
capital markets economics at Scotiabank.
    It supports the Bank of Canada's inclination "not to get too
carried away by the immediate spurt of activity in the initial
stages of recovery and that it is going to be a long and bumpy
recovery ahead," Holt said.
    Separate data from Statistics Canada showed that Canada's
annual inflation rate was 0.5% in September, up from 0.1% in
August.
    The U.S. dollar        lost ground against a basket of major
currencies and shares on Wall Street rose as investors watched
for signs that Washington could be close to agreeing on the next
coronavirus aid package.
    Canada sends about 75% of its exports to the United States,
including oil. U.S. crude oil futures        fell 1.7% to $40.99
a barrel after a surprise build-up in U.S. crude stockpiles.

    Canadian government bond yields were higher across a steeper
curve in sympathy with U.S. Treasuries. The 10-year
rose 1.9 basis points to 0.625%, having touched its highest
since Sept. 1 at 0.653%.

 (Reporting by Fergal Smith
Editing by Alistair Bell)

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