TORONTO, April 3 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Wednesday as the greenback gave back some recent broad-based gains and investors turned attention to a Bank of Canada policy decision next week.
The loonie was trading 0.3% higher at 1.3525 to the U.S. dollar, or 73.94 U.S. cents, after trading in a range of 1.3512 to 1.3588.
"It's a broad dollar move," said Erik Nelson, a macro Strategist at Wells Fargo Securities in London. "We had relatively benign U.S. data here in the last little bit."
The U.S. dollar (.DXY), opens new tab fell against a basket of major currencies as U.S. services industry growth slowed further in March and a measure of prices paid by businesses for inputs dropped to a four-year low, which bodes well for the inflation outlook.
Adding to support for the Canadian currency, the price of oil, one of Canada's major exports, climbed to its highest level since October as investors worried about supply disruptions from a worsening geopolitical landscape. U.S. crude oil futures were up 0.9% at $85.91 a barrel.
Still, the loonie remained within the roughly 1.34 to 1.36 range it has occupied in recent months.
"We're still just in a sideways, choppy (pattern) as we wait for the BoC," Nelson said.
Investors expect the Canadian central bank to leave its benchmark interest rate unchanged at a 22-year high of 5% at a policy decision next Wednesday but to then begin a rate cutting campaign in June or July.
The downturn in Canada's services sector deepened in March as higher prices and elevated borrowing costs crimped customer demand, S&P Global Canada services PMI data showed.
The Canadian 10-year bond yield was nearly unchanged at 3.606%, after on Tuesday touching its highest intraday level in nearly three weeks at 3.678%.
Reporting by Fergal Smith; editing by David Evans
