* Canadian dollar rises 0.1% against the greenback * Loonie trades in a range of 1.3340 to 1.3387 * Price of U.S. oil increases 0.7% * Canadian bond yields move higher across the curve By Fergal Smith TORONTO, July 29 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Wednesday as oil prices climbed and rising coronavirus cases in the United States weighed on the greenback, with the focus turning to a Federal Reserve policy announcement. The loonie was trading 0.1% higher at 1.3363 to the U.S. dollar, or 74.83 U.S. cents. The currency, which on Tuesday touched its strongest intraday level in nearly seven weeks at 1.3327, traded in a range of 1.3340 to 1.3387. "Support for the USD has been relatively firm in the low 1.33 range in the past week but the downside retains a vulnerable look given the weak USD tone generally," strategists at Scotiabank, including Shaun Osborne, said in a note. The U.S. dollar fell to a two-year low against a basket of major currencies on Wednesday as pressure built on the Fed to strike a dovish policy stance at its interest rate announcement later in the day amid record increases in COVID-19 infections in some U.S. states. The price of oil, one of Canada's major exports, rose after a surprise drop in U.S. crude inventories, but demand concerns due to rising COVID-19 infections capped gains. U.S. crude prices were up 0.7% at $41.31 a barrel. Canada's GDP report for May is due on Friday. It is expected to show some recovery in the economy after a sharp contraction in April. Canadian government bond yields were higher across the curve on Wednesday, with the 10-year up by half of a basis point at 0.481%. On Tuesday, it hit its lowest intraday level since June 15 at 0.472%. (Reporting by Fergal Smith; editing by Jonathan Oatis)
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