* Canadian dollar rises 0.2% against the greenback
* Canadian retail sales flatlined in December
* Price of U.S. oil decreases 1.4%
* Canadian bond yields fall across a flatter yield curve
By Fergal Smith
TORONTO, Feb 21 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Friday as the greenback gave
back some recent gains against a basket of other major
currencies and a measure of domestic underlying retail sales
rose in December.
Canadian retail sales were unchanged in December from
November at C$51.65 billion, undershooting the 0.1% gain that
analysts had expected, data from Statistics Canada showed. But
sales were more robust after excluding motor vehicles and parts
dealers, rising 0.5%.
"Retail sales extended the string of disappointing readings
on the Canadian economy, but some of the stripped down measures
proved more encouraging than the headline," said Royce Mendes, a
senior economist at CIBC Capital Markets.
Last month, the Bank of Canada left the door open to an
interest rate cut should a recent slowdown in domestic growth
persist. Investors see about a 50% chance that the central bank
would ease by April.
At 10:09 a.m. (1509 GMT), the Canadian dollar was
trading 0.2% higher at 1.3235 to the greenback, or 75.56 U.S.
cents. The currency traded in a range of 1.3233 to 1.3269.
For the week, the loonie was up 0.1%.
The U.S. dollar pulled back from a three-year peak as
traders swooped back into the Japanese currency after its
worst four-day run in more than two years.
Stocks on Wall Street and the price of oil, one of Canada's
major exports, fell as a rise in new cases of coronavirus and
weak Asian data fueled uncertainty about the economic outlook.
U.S. crude oil futures were down 1.4% at $53.12 a
barrel.
Canadian government bond yields were lower across a flatter
yield curve in sympathy with U.S. Treasuries. The 10-year yield
fell 10.5 basis points to 1.254%, nearly its lowest
since October.
(Reporting by Fergal Smith; Editing by Steve Orlofsky)
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