* Canadian dollar falls 0.2% against greenback
* Price of U.S. oil increases nearly 2%
* Canadian bond yields decline across flatter curve
By Fergal Smith
TORONTO, June 9 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Tuesday as investors captured some recent gains for the currency ahead of an interest rate decision on Wednesday from the Federal Reserve.
The loonie CAD= was trading 0.2% lower at 1.3404 to the greenback, or 74.60 U.S. cents. The currency traded in a range of 1.3359 to 1.3487.
Still, the loonie, which on Monday notched a three-month high at 1.3352, has rallied more than 9% since March.
"It has been a marvelous run in the Canadian dollar and there is a little profit-taking today ahead of the FOMC and with equity markets declining," said Rahim Madhavji, president at KnightsbridgeFX.com.
U.S. stocks fell after recent strong gains, while the U.S. dollar .DXY slumped to a near three-month low against a basket of major currencies as investors weighed prospects of additional easing steps from the Fed, such as yield-curve control, or the targeting of longer-term interest rates. price of oil, one of Canada's major exports, turned higher, helped by recent commitments from major oil producers to curb production. U.S. crude oil futures CLc1 settled nearly 2% higher at $38.94 a barrel. government bond yields were lower across a flatter curve in sympathy with U.S. Treasuries.
The 10-year yield CA10YT=RR was down 3 basis points at 0.648%. On Friday, it touched its highest intraday level since mid-April at 0.768%.