* Loonie falls 0.7% against the U.S. dollar
* Canadian wholesale rises by 0.3 percent in February
* Price of U.S. oil increases 1.1%
* Canada-U.S. 2-year spread posts a one-month wide
By Fergal Smith
TORONTO, April 23 (Reuters) - The Canadian dollar weakened to a nearly four-week low against its U.S. counterpart on Tuesday as the greenback climbed broadly and investors bet that the Bank of Canada would forgo language pointing to further interest rate hikes.
Canada's central bank is expected to hold its benchmark interest rate steady at 1.75% on Wednesday and for the rest of this year, with calls for the next hike in early 2020 resting on a knife's edge, a Reuters poll showed. hiking bias will probably be removed completely from the statement," said Ranko Berich, head of market analysis at Monex Canada and Monex Europe. "The impetus for a rate hike has been removed by slowing economic data."
The Canadian economy has taken a hit from the province of Alberta's mandatory production cut of oil - its biggest export - a slowdown in the housing market and wilting business sentiment over worries surrounding the U.S.-China trade war.
Canadian wholesale trade increased by 0.3 percent in February from January, Statistics Canada said on Tuesday. But trade was down 1.5% after excluding the motor vehicle and motor vehicle parts and accessories subsector. U.S. dollar .DXY rose against a basket of major currencies as traders favored the greenback ahead of the release on Friday of U.S. gross domestic product data for the first three months of 2019. 3:23 p.m. (1923 GMT), the Canadian dollar CAD=D4 was trading 0.7% lower at 1.3436 to the greenback, or 74.43 U.S. cents, its biggest decline in nearly seven weeks. The currency touched its weakest level since March 29 at 1.3443.
The decline for the loonie came despite a nearly six-month high for the price of oil as sources said Gulf OPEC members were ready to raise output only if there was demand before offsetting any shortfall following a U.S. decision to end waivers for buyers of Iranian crude. crude oil futures CLc1 settled 1.1% higher at $66.30 a barrel.
Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR rose 8.5 Canadian cents to yield 1.576% and the 10-year CA10YT=RR was up 27 Canadian cents to yield 1.758%.
Canada's two-year yield fell 1.9 basis points further below the yield on the equivalent U.S. bond to a spread of -78.8 basis points, its widest since March 22.