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* Canadian dollar rises 0.5% against the greenback

* Loonie touches its lowest level since Aug. 17 at 1.3259

* Price of U.S. oil increases 2.2%

* Canadian bond yields trade mixed across a steeper curve

By Fergal Smith

TORONTO, Sept 9 (Reuters) – The Canadian dollar rose against
the greenback on Wednesday as oil prices rallied and the Bank of
Canada maintained a pledge to support the economy as it moves
into a recuperation phase, with the loonie rebounding from an
earlier three-week low.

The Canadian dollar was trading 0.5% higher at 1.3164
to the greenback, or 75.96 U.S. cents. The currency hit its
weakest intraday level since Aug. 17 at 1.3259.

The Bank of Canada held its key overnight interest rate
steady at 0.25%, as expected, and said the bounce-back in
economic activity in the third quarter looks to be

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