TORONTO - The Canadian dollar fell against its U.S. counterpart Wednesday after data on American retail sales added to fears of another recession.

The loonie was down 0.40 cents at 101.06 cents US in pre-market trading.

Consumers spent less last month on autos, clothing and furniture, leaving retail sales unchanged in August, the U.S. Commerce Department said.

And, in addition to no growth in August, July was weaker than first thought, the department said.

The flat reading in August was a surprise given reports from retailers during the month that back-to-school shopping and auto sales appeared to have been strong compared with a year ago.

Other data from the U.S. showed companies paid the same amount for wholesale goods last month as a drop in energy prices offset higher food costs.

Excluding the volatile food and energy categories, core wholesale prices edged up 0.1 per cent, the smallest increase in three months. The figures indicate that inflation pressures are easing.

Weaker commodity prices also put pressure on the loonie.

Oil slipped 58 cents to US$89.63 per barrel and copper was down two cents at US$3.95 a pound. Gold, considered a safe haven in times of economic tumult, added $2.20 to US$1,832.30 an ounce.

In European economic news, Moody's downgraded the credit ratings of French banks Societe Generale and Credit Agricole on Wednesday following a period of huge volatility in the markets as investors fretted about their exposure to Greek debt.

Some sort of move by Moody's had been widely expected this week since the agency had put them and rival BNP Paribas on review for downgrade in mid-June. But there had been fears that the downgrades would be even harsher.

The leaders of Greece, France and Germany will seek ways to contain the spiralling debt crisis and prevent it from further roiling global financial markets in a teleconference on Wednesday evening. That will follow days of uncertainty in the markets as to whether Greece will get the next batch of bailout funds to say afloat beyond next month.

In addition, the Italian government has passed a first vote on its austerity plan.