TORONTO: The Canadian dollar edged lower against its US counterpart on Thursday, but held near 14-month highs as oil prices rose and the greenback turned lower against a basket of major currencies.
The US dollar gave up earlier gains after a regional gauge of business conditions fell to an eight-month low and as comments by European Central Bank President Mario Draghi boosted the euro.
Oil prices built on gains from the previous session after falling US crude and oil product inventories lifted the market.
US crude prices were up 0.74 percent to $47.47 a barrel.
At 9:22 a.m. ET (1322 GMT), the Canadian dollar was trading at C$1.2613 to the greenback, or 79.28 US cents, down 0.1 percent.
The currency traded in a range of C$1.2595 to C$1.2640.
On Wednesday, the loonie touched its strongest since early May 2016 at C$1.2578. Recent strength for the currency has come after the Bank of Canada turned hawkish in June.
The central bank raised interest rates last week for the first time since 2010 and signaled it would hike again over the coming months.
Canadian government bond prices were higher across the yield curve, with the two-year up 2.4 Canadian cents to yield 1.242 percent and the 10-year rising 22 Canadian cents to yield 1.873 percent.
Last week, the 10-year yield touched its highest since December 2014 at 1.948 percent.
Retail sales data for May and the June inflation report are due out on Friday.
The Bank of Canada has said it expects tame inflation to be temporary but economists will watch the report to try to gauge the timing of the central bank's next rate increase.
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