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The Canadian dollar edged higher against its U.S. counterpart on Wednesday as oil prices rose and Wall Street steadied, with the loonie clawing back some of the previous day’s decline ahead of comments by Bank of Canada Deputy Governor Timothy Lane.

The loonie was trading 0.1 per cent higher at 1.3126 to the greenback, or 76.18 U.S. cents, having traded in a range of 1.3116 to 1.3157. Tuesday’s decline for the loonie broke a string of four straight daily gains.

Futures tracking the S&P 500 were slightly higher after being pressured the previous day by fading hopes of a deal on federal aid as well as a halt in trials of a COVID-19 vaccine.

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Canada runs a current account deficit and is a major producer of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.

U.S. crude prices were up 1.6 per cent at $40.84 a barrel despite concern that soaring coronavirus cases worldwide would weigh on fuel demand.

Lane is due to participate in a panel discussion at 10:30 a.m. on central bank digital currency. Last week, Bank of Canada Governor Tiff Macklem said that the central bank is not actively discussing negative interest rates but they are a tool it could use in case it needs to do more to tackle economic challenges caused by the coronavirus outbreak.

Canadian government bond yields were lower across a flatter curve on Wednesday, with the 10-year down 1.5 basis points at 0.574 per cent.

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