(Adds analyst quotes and details throughout; updates prices)
* Canadian dollar weakens 0.2% against the greenback
* Loonie touches its strongest level since March 22 at
1.2476
* Canadian factory sales fall 1.6% in February
* Canadian 10-year yield hits a 5-week low at 1.434%
By Fergal Smith
TORONTO, April 15 (Reuters) - The Canadian dollar edged
lower against its U.S. counterpart on Thursday as domestic data
showed a bigger-than-expected drop in factory sales and
investors weighed restrictions on the economy, with the loonie
pulling back from an earlier three-week high.
The loonie was trading 0.2% lower at 1.2543 to the
greenback, or 79.73 U.S. cents, the weakest performance among
G10 currencies. It touched its strongest intraday level since
March 22 at 1.2476.
The manufacturing data "may have just helped USD-CAD avoid
going sub-1.25 and staying there for the remainder of the
session," said Amo Sahota, director at Klarity FX in San
Francisco.
Canadian manufacturing sales decreased 1.6% in February from
January, compared with expectations for a 1% decline, amid a
shortage of semiconductors that has stalled production at some
auto plants, Statistics Canada said.
Lockdowns in some provinces to contain the coronavirus
pandemic could also be weighing on the loonied, but it is likely
a pause in momentum before the currency takes another leg
higher, Sahota said.
Canada is battling a third wave of the virus. Last Thursday,
Ontario, Canada's most populous province, began a four-week
stay-at-home order.
Analysts expect the loonie, which has gained 1.5% since the
beginning of the year, to benefit from a potential reduction by
the Bank of Canada of its bond purchases, a Reuters poll showed
this month.
The central bank, which is due to make an interest rate
decision next week, has become increasingly concerned in recent
months that housing gains are being driven by excessive
exuberance.
A measure of home prices rose 20.1% year-over-year in
March, the Canadian Real Estate Association said.
Canadian government bond yields fell across a flatter curve,
tracking U.S. Treasuries. The 10-year touched its
lowest since March 11 at 1.434% before rebounding to 1.469%,
down 5.9 basis points on the day.
(Reporting by Fergal Smith; editing by Jonathan Oatis)
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