TORONTO, March 13 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Wednesday, supported by higher oil prices and recent signaling from the Bank of Canada it is in no rush to cut interest rates.
The Canadian currency was trading 0.1% higher at 1.3470 per U.S. dollar, or 74.24 U.S. cents, after trading in a range of 1.3460 to 1.3498. The currency recovered the ground it lost after heated U.S. inflation data on Tuesday.
"The loonie's momentum clearly remains in the bullish direction after the Bank of Canada poured cold water on imminent rate cuts last week," said Kyle Chapman, FX markets analyst at Ballinger & Co in London.
Last Wednesday, the Bank of Canada said it was too early to consider easing policy as it kept its benchmark interest rate on hold at a 22-year high of 5%.
The price of oil , one of Canada's major exports, settled 2.8% higher at $79.22 a barrel on Wednesday after a surprise withdrawal in U.S. crude inventories.
Canadian government bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 2.6 basis points at 3.427%.
Canadian manufacturing sales data for January, due on Thursday, could offer clues on the strength of the economy. Economists expect sales to rise 0.4%.
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Reporting by Fergal Smith; editing by Jonathan Oatis
