Wednesday morning in New York, the Canadian dollar edged slightly lower against its major rivals after having acquired considerable gains in early morning. The loonie thus dropped from a 4-week high against the euro and a 2-day high against the US dollar.

Traders weighed the Energy Information Administration data released today showing crude oil inventories increased for a fifth straight week, however, less than analysts were expecting. According to the report, the U.S. commercial crude oil inventories increased 1.7 million barrels in the week ended April 3. Economists were looking for a build in inventories of about 2.3 million barrels in the recent week.

Crude oil prices have turned sharply higher following the report. Light sweet crude oil has surged $1.69, up $50.83 per barrel. Prices reached as high as $51.10 after earlier hitting as low as $47.37.

In economic news, the seasonally adjusted annual rate of housing starts in Canada increased to 154,700 units in March from 136,100 units in February, according to Canada Mortgage and Housing Corporation (CMHC).

The Canadian dollar that jumped to a 2-day high of 1.2311 against the US dollar by 8:30 am ET, reversed direction thereafter. The loonie drifted lower to 1.2403 before the EIA inventories report and leveled off shortly. The greenback-loonie pair was worth 1.2374 at yesterday's close.

In the U.S., wholesale inventories fell 1.5 percent in February following a revised decrease of 0.9 percent in January, according to a report released by the Department of Commerce. Economists had expected inventories to fall by 0.6 percent compared to the 0.7 percent decrease originally reported for the previous month.

The Canada's loonie moved range bound against the Japanese yen in early New York deals, trading in a range between 81.5 and 80.6. The loonie-yen pair, which closed Tuesday's deals at 81.21, is currently trading near 81.

The current account balance in Japan swung to a surplus in February, coming in at 1.116 trillion yen, the Ministry of Finance said in a preliminary report today. That's down 55.6 percent on year, even though it beat expectations for a surplus of 1.071 trillion yen following the record 172.8 billion yen shortfall in January.

Meanwhile, the Bank of Japan maintained its economic assessment by saying that economic conditions have deteriorated significantly in Japan. The BoJ stated, Japan's economic conditions are likely to continue deteriorating for the time being, reiterating its view last month.

The central bank said in its Monthly Report of Recent Economic and Financial Developments that financial conditions have remained tight.

Against the European common currency, the Canadian dollar lost some ground after hitting a 4-week high in early New York trading on Wednesday. The loonie that reached as high as 1.6318 against the euro by 8:30 am ET slipped to 1.6423 after two hours. The euro-loonie pair is currently trading near yesterday's closing value of 1.6423.

On the economic front from the euro area, Germany's Federal Statistical Office announced today that the trade surplus stood at EUR 8.7 billion in February, up from EUR 7 billion surplus recoded in the previous month. Economists had expected the surplus of EUR 7.5 billion.

Looking ahead, the US Federal Reserve is scheduled to release the minutes of its March 17th-18th meeting at 2:00 pm ET.

Along with an announcement to keep interest rates unchanged at exceptionally low levels following its two-day FOMC meeting in March, the Fed said it would purchase $300 billion worth of longer-term securities over the next 6 months. Additionally, the Fed said it will buy an incremental $750 billion worth of mortgage-backed securities and $100 billion of government sponsored enterprises - GSE debt. The Fed also said it intends to add $100 billion to its purchases of agency debt.

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