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Canadian dollar steadies ahead of Bank of Canada minutes

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto

By Fergal Smith

TORONTO (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Tuesday as investors weighed softer-than-expected U.S. retail sales data and awaited potential clues on prospects of additional interest rate cuts from the Bank of Canada.

The loonie was trading nearly unchanged at 1.3720 to the U.S. dollar, or 72.89 U.S. cents, after trading in a range of 1.3710 to 1.3756. The currency has been in a holding pattern since touching last Tuesday a near two-month low at 1.3791.

"Slightly weaker (U.S.) retail sales (on Tuesday) is just making sure the U.S. dollar doesn't run away," said Rahim Madhavji, president at KnightsbridgeFX.com.

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The U.S. dollar edged lower against a basket of major currencies after retail sales data indicated signs of exhaustion among U.S. consumers, boosting the case for Federal Reserve rate cuts later this year.

The BoC this month became the first G7 central bank to begin cutting interest rates. Minutes from the June 5 policy decision are due to be released on Wednesday.

"We are going to see in the minutes what the Bank of Canada is thinking in terms of rate cuts and if they are even considering the weakness in the Canadian dollar as part of their rate cut decision," Madhavji said.

Data on Friday showed that speculators have raised their bearish bets on the currency to a record high level.

The price of oil, one of Canada's major exports, settled 1.5% higher at $81.57 a barrel, extending its recent gains.

Canadian government bond yields moved lower across the curve, tracking moves in U.S. Treasuries. The 10-year was down 4.2 basis points at 3.274%.

(Reporting by Fergal Smith; Editing by Will Dunham)