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The Canadian dollar CADUSD was little changed against its U.S. counterpart on Wednesday, with the currency sticking to its recent trading range even as economic data added to evidence of an easing in U.S. inflation pressures.

The U.S. dollar tumbled against a basket of major currencies and bond yields fell as U.S. producer prices and retail sales fell more than expected in December, supporting hopes of smaller interest rate hikes by the Federal Reserve.

Canada sends about 75 per cent of its exports to the United States, including oil, whose price rose to its highest level since early December on optimism that the lifting of China’s strict COVID-19 curbs will boost demand in the world’s top oil importer.

U.S. crude prices were up 2.2 per cent at $81.98 a barrel.

The Canadian dollar was nearly unchanged at 1.3385 per U.S. dollar, or 74.71 U.S. cents, making it the only G10 currency other than the yen not to gain ground.

The currency has largely traded in a sideways pattern since touching last Friday a seven-week high at 1.3320.

Canadian producer prices were also lower in December. They fell 1.1 per cent from the previous month, while the annual rate of growth eased to 7.6 per cent from 9.4 per cent.

This follows data on Tuesday showing that consumer prices rose at the slowest annual pace since February last year.

The Bank of Canada has been hiking rates aggressively to tackle inflation. Money markets see about a 70 per cent chance that the central bank would tighten by a further 25 basis points when it makes its policy decision next Wednesday.

Canadian government bond yields were lower across the curve, tracking the move in U.S. Treasuries.

The 10-year touched its lowest since Dec. 7 at 2.724 per cent before recovering slightly to 2.734 per cent, down 12.6 basis points on the day.