CANADA FX DEBT-Canadian dollar edges higher ahead of retail sales data

By Fergal Smith

TORONTO, Dec 18 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday but the move was limited ahead of domestic retail sales data and after Canadian Prime Minister Mark Carney played down the chances of sectoral trade deals.

The loonie CAD= was trading 0.1% higher at 1.3770 per U.S. dollar, or 72.62 U.S. cents, after moving in a range of 1.3757 to 1.3796. On Tuesday, the currency touched a near three-month high at 1.3728.

Carney said a planned trade deal with the United States on key sectors was unlikely, saying the issue would be covered in a review of the United States-Canada-Mexico trade pact expected next year.

"We still have this looming fear about what the future is going to bring us in Q1 both on the tariff tensions and how we progress on that side of things and then whether Canadian consumers are going to spend, spend, spend," said Amo Sahota, director at Klarity FX in San Francisco.

"The market generally wants to see a little bit more evidence of strong household consumption to buy into the fact that Canadian GDP is going to fare a little better than estimated."

Canadian retail sales data for October, due on Friday, is expected to show a flat reading compared with September.

The nation's most recent GDP data, for the third quarter, showed an annualized gain of 2.6% but growth was driven by a drop in imports, with household consumption disappointing.

W all Street's main indexes climbed and U.S. Treasury yields eased as a soft U.S. inflation reading kept alive chances of interest rate cuts by the Federal Reserve.

The price of oil CLc1, one of Canada's major exports, rose 0.9% to $56.43 a barrel as investors assessed the likelihood of further U.S. sanctions against Russia and the supply risks posed by a blockade of Venezuelan oil tankers.

Canadian bond yields tracked U.S. Treasury yields lower. The 10-year CA10YT=RR was down 2.3 basis points at 3.413%.