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Canadian dollar gains 0.1% against the greenback

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Price of U.S. oil settles 2.1% higher

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Bond yields trade mixed across a flatter curve

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Ontario projects narrower C$6.6 billion deficit

By Fergal Smith

TORONTO, Oct 30 (Reuters) - The Canadian dollar

strengthened modestly against its U.S. counterpart on Wednesday

as oil prices rose and the greenback posted broad-based

declines, but the loonie remained within reach of an earlier

12-week low.

The loonie was trading 0.1% higher at 1.39 to the

U.S. dollar, or 71.94 U.S. cents, after touching its weakest

intraday level since Aug. 5 at 1.3940.

"The U.S. dollar has lost a little bit of edge today," said

Amo Sahota, director at Klarity FX in San Francisco. "We may be

finding some pressure on the dollar coming from other

currencies."

The greenback gave back some recent gains against a

basket of major currencies including the euro after data

showed the euro zone economy growing faster than expected last

quarter.

The price of oil, one of Canada's major exports, rose after

data showed U.S. crude and gasoline inventories fell

unexpectedly last week. U.S. crude oil futures settled

2.1% higher at $68.61 a barrel.

Canada's currency has weakened 3.5% since late September.

Still, that has not stopped Bank of Canada Governor Tiff Macklem

from projecting further interest rate cuts if the economy

evolves as the central bank expects.

"He doesn't look like he's too concerned about Canadian

dollar weakness in recent weeks," Sahota said.

Macklem and Senior Deputy Governor Carolyn Rogers are due to

appear before the Standing Senate Committee on Banking, Commerce

and the Economy at 4:20 p.m. ET (2015 GMT).

Canadian government bond yields were mixed across a flatter

curve, with the 10-year down roughly half a basis

point at 3.240%.

Ontario, Canada's most populous province and one of the

world's biggest sub-sovereign borrowers, projected a narrower

budget deficit of C$6.6 billion for the current fiscal year.