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Canadian dollar weakens 0.2% against the greenback

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For the week, the loonie heads for a decline of 1.1%

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Advance data shows retail sales down 1.1% in May

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Bond yields ease across the curve

By Fergal Smith

TORONTO, June 20 (Reuters) - The Canadian dollar edged

lower against its U.S. counterpart on Friday as domestic retail

sales data added to recent evidence of an economic slowdown.

Retail sales were up 0.3% in April on a monthly basis as the

momentum seen in the previous months when customers brought

forward purchases to beat the impact of tariffs continued, but a

preliminary estimate showed that the number is likely to

contract by 1.1% in May.

"Canadian consumers continued to spend in April, but a

decline in the May advance estimate for retail sales provides

another indication that the economy is heading for a stall in

Q2," Andrew Grantham, a senior economist at CIBC Capital

Markets, said in a note.

"That renewed consumer caution amid tariff uncertainty and a

weakening labour market is likely to persist for a little while

yet, and we continue to expect two more 25 bp (basis point)

interest rate cuts by the Bank of Canada in the second half of

the year to help support a recovery."

The loonie was trading 0.2% lower at 1.3730 per U.S.

dollar, or 72.83 U.S. cents, after trading in a range of 1.3688

to 1.3739. On Thursday, the currency touched a near three-week

low at 1.3746, and was on track for a weekly decline of 1.1%.

Some positives for the currency, such as the prospect of a

speedy economic deal between Canada and the United States, have

been offset by recent safe-haven demand for the U.S. dollar.

"Heightened geo-political tensions may persist for now, with

the potential of US involvement in the Israel/Iran confrontation

dangling over markets for the next couple of weeks," Shaun

Osborne and Eric Theoret, strategists at Scotiabank, said in a

note.

U.S. crude futures were trading 0.2% lower at $74.95

a barrel after the White House delayed a decision on U.S.

involvement in the Middle East conflict, but remained on course

for a third consecutive weekly rise. Oil is one of Canada's

major exports.

Canadian bond yields eased across the curve, with the

10-year down 2 basis points at 3.315%.