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The Canadian dollar on Wednesday strengthened against its U.S. counterpart and all the other G10 currencies as oil held on to much of its rally in recent days and investors weighed hotter-than-expected U.S. inflation data.

The loonie was trading 0.2 per cent higher at 1.2407 to the greenback, or 80.60 U.S. cents, after touching its strongest intraday level since last Thursday at 1.2404.

The Australian dollar was the only other G10 currency to gain ground against the greenback. It was up 0.1 per cent.

The price of oil, one of Canada’s major exports, steadied after three days of gains, with investors turning attention to the release later on Wednesday of U.S. oil inventory data. U.S. crude prices were down 0.2 per cent at $84.01 a barrel.

U.S. consumer prices rose at an annual rate of 6.2 per cent in October, the biggest gain since 1990, further signs that inflation could remain uncomfortably high well into next year amid snarled global supply chains.

Canada’s inflation report for October is due next Wednesday, which could offer clues on the Bank of Canada policy outlook.

The central bank should not change its three-decade old monetary policy framework, which is flexible enough to deal with bouts of price increases, particularly as tweaking it could trigger more public anxiety over hot inflation, analysts say.

Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year rose 3.1 basis points to 1.627 per cent.

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