CANADA FX DEBT-Canadian dollar steadies as preliminary retail sales data disappoints

By Fergal Smith

TORONTO, Oct 23 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Thursday as mixed domestic retail sales data offset a jump in oil prices.

The loonie CAD= was trading nearly unchanged at 1.3995 per U.S. dollar, or 71.45 U.S. cents, after moving in a range of 1.3980 to 1.4004. On Wednesday, the currency touched a 12-day high at 1.3974.

Canadian retail sales grew by 1% in August, matching expectations, after falling 0.7% in July, as consumers spent more on new cars, at supermarkets and for clothing. An advance estimate for September was less upbeat, showing a decline of 0.7%.

"Despite a decent August report, the disappointing September flash highlights the underlying weakness in Canadian retail spending," Shelly Kaushik, a senior economist at BMO Capital Markets, said in a note.

"Plus, net risks remain to the downside given ongoing trade uncertainty, keeping the Bank of Canada on its dovish path."

Canada will not allow unfair U.S. access to its markets if talks on various trade deals with Washington ultimately fail, Prime Minister Mark Carney told reporters.

Investors expect the Bank of Canada to cut interest rates further in a policy decision next Wednesday. Last month, the central bank lowered its benchmark rate to a three-year low of 2.50%.

The U.S. dollar .DXY rose against a basket of major currencies as traders waited for the delayed release of U.S. consumer inflation data on Friday.

The price of oil CLc1, one of Canada's major exports, surged 5.8% to $61.87 a barrel after the U.S. imposed sanctions on major Russian suppliers.

Canadian bond yields edged higher across a steeper curve, tracking moves in U.S. Treasuries. The 10-year CA10YT=RR was up 1.4 basis points at 3.084%.