C$ in modest retreat on soft data

TORONTO: The Canadian dollar fell versus its US counterpart as well as a string of other major currencies on Friday following a batch of lackluster economic data, but trading was subdued and range-bound, and the currency ended the week almost flat.

Data on Friday showed that foreigners in June sold the largest amount of Canadian securities since October 2007, with a record fall in holdings of Canadian government debt a particular worry.

"That's a concern because it's one of the things that has been supporting the Canadian dollar, and that's the first real piece of evidence we have that that story has shifted," said Camilla Sutton, chief currency strategist at Scotiabank.

Also, Canadian manufacturing sales unexpectedly fell in June, scotching forecasts that called for an increase. It was the fourth monthly drop in manufacturing sales in six months and added to expectations of softer economic growth in the second quarter.

"The Canadian data (has been) uninfluential in pushing USD/CAD away from what we see as the short-term, certainly intraday, range of C$1.0300 to C$1.0350," said Jack Spitz, managing director of foreign exchange at National Bank Financial.

The Canadian dollar ended the session at C$1.0339 versus the US dollar, or 96.72 US cents, weaker than Thursday's close of C$1.0304, or 97.05 US cents. It gained 0.1 percent over the course of the week.

The currency was also sharply lower against the Australian and New Zealand dollars on Friday, and slipped against the euro and the British pound .

In the United States, housing starts and permits for home construction rose less than expected last month, suggesting that higher mortgage rates could be hampering the housing market's momentum.

The figures cast doubt on how fast the US Federal Reserve would move to scale back its bond-buying stimulus program.

Prices for Canadian government debt were lower across the maturity curve.

The two-year bond slipped 2 Canadian cents to yield 1.219 percent and the benchmark 10-year bond fell 32 Canadian cents to yield 2.714 percent, its highest yield in nearly two years.