* Canadian dollar rises 0.1% against the greenback * For the week, the loonie was up 0.5% * Price of U.S. oil dips 0.3% * Canada's 10-year government bond gains 4 Canadian cents TORONTO, Oct 25 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Friday, adding to this week's gain after investors took in stride the federal election win of Prime Minister Justin Trudeau's Liberal party. Trudeau, who lost his majority in Parliament, has promised since Monday's election to continue with the Trans Mountain pipeline expansion, which could get more of Canada's oil to international markets. He has also prioritized a tax cut for the middle class. Looser fiscal policy could boost the economy, reducing the chances of interest rate cuts over the coming months from the Bank of Canada. Canada's central bank is expected to leave its benchmark rate unchanged at 1.75% at next Wednesday's announcement and through the rest of the year, a Reuters poll showed. Also next Wednesday, the U.S. Federal Reserve is seen easing for the third time since July. That could lower the range for the Fed's benchmark rate below the Bank of Canada's equivalent rate for the first time since December 2016. At 10:04 a.m. (1404 GMT), the Canadian dollar was trading 0.1% higher at 1.3063 to the greenback, or 76.55 U.S. cents. The currency, which posted on Thursday its strongest intraday level in more than three months at 1.3053, traded in a narrow range of 1.3058 to 1.3077. For the week, the loonie was on track to rise 0.5%. Friday's modest gain for the Canadian dollar came as Mexico's Deputy Foreign Minister for North America, Jesus Seade, said that he believes U.S. lawmakers will begin soon the formal process of approving the new United States-Mexico-Canada (USMCA) trade deal. Canada sends about 75% of its exports to the United States, including oil. Oil prices dipped on Friday but were on track for strong weekly gains as support from a surprise draw in U.S. inventories and possible action from OPEC and its allies to extend output cuts outweighed broader economic concerns. U.S. crude oil futures were down 0.3% at $56.08 a barrel. Alberta, Canada's main oil-producing province, said on Thursday its budget deficit would increase to C$8.7 billion in the fiscal year ending March 31, up from C$6.7 billion in 2018-19, because of a provision made for potential losses on crude-by-rail contracts that were signed by the previous government. The price of Canada's 10-year government bond rose 4 Canadian cents to yield 1.519%. (Reporting by Fergal Smith Editing by Chizu Nomiyama)
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