Canadian dollar extends rebound from four-month low as oil prices rise

FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto, Ontario, Canada, January 23, 2015. REUTERS/Mark Blinch/File Photo/File Photo

TORONTO (Reuters) - The Canadian dollar edged higher against its broadly weaker U.S. counterpart on Wednesday, extending its recovery from a nearly four-month low the day before as oil prices rebounded.

The price of oil, one of Canada’s major exports, recouped some of the previous session’s slide on the growing prospect of OPEC and allied producers cutting output at a meeting next month.

U.S. crude CLc1 prices were up 0.9 percent at $56.20 a barrel.

The U.S. dollar .DXY held its earlier losses against a basket of currencies as data showed U.S. consumer prices grew in line with analysts forecasts in October, reinforcing the view domestic inflation is increasing at a moderate pace.

At 9:01 a.m. (1401 GMT), the Canadian dollar CAD=D4 was trading 0.1 percent higher at 1.3224 to the greenback, or 75.62 U.S. cents. The currency, which touched on Tuesday its weakest since July 20 at 1.3264, traded in a range of 1.3210 to 1.3248.

Canadian government bond prices dipped across much of a steeper yield curve, with the 10-year CA10YT=RR falling 7 Canadian cents to yield 2.466 percent.

Reporting by Fergal Smith; Editing by Susan Thomas