The Canadian dollar declined against its most major counterparts in European deals on Wednesday, as traders await the Bank of Canada's interest rate decision, scheduled later today.

Economists expect the bank to retain benchmark rate unchanged at 0.75 percent, after a rate cut in January. Traders keenly await accompanying statement for more hints about chances of further rate cut, as recent plunge in oil prices is negative for economy.

In a speech last week, the BoC chief Stephen Poloz hinted that the January rate cut "buys us some time to see how the economy actually responds." But he also left the door open for further rate cuts, if needed.

Oil prices edged up ahead of central bank decisions in Europe and U.K. on Thursday, as well as U.S. jobs data on Friday.

Official inventory data from the U.S. Energy Information Administration, due later in the day, will be watched for indication on oil supplies. Data from the American Petroleum Institute showed late Tuesday that U.S. crude inventories rose by 2.9 million barrels for the week ended February 27.

The loonie, which ended yesterday's trading at 1.2494 per greenback, slipped to 1.2532. The loonie may possibly find support around the 1.26 zone.

The loonie fell to a 2-day low of 95.41 against the yen, down from Tuesday's closing quote of 95.80. Next key support for the loonie may be located around the 94.00 mark.

Japan's service sector contracted in February after expanding in the previous month, results of a survey by Markit Economics showed.

The services purchasing managers' index, or PMI, fell to 48.5 in February from 51.3 in January. This marked a moderate rate of decline in service sector activity.

The loonie hit 0.9819 against the aussie, its lowest since February 26. If the loonie continues its downward trading, it may target support near the 0.99 area.

On the flip side, the loonie firmed to 1.3909 against the euro in early deals and has been steady since then. The pair was valued at 1.3963 at yesterday's close.

Eurozone retail sales growth accelerated unexpectedly in January on both food and non-food turnover, according to data from the Eurostat.

Retail sales were up 1.1 percent on a monthly basis, faster than a revised 0.4 percent growth in December.

Looking ahead, Markit's U.S. PMI, ISM U.S. non-manufacturing PMI and private sector employment report - all for February are slated for release in the New York session.

At 9:00 am ET, U.S. Federal Reserve Bank of Chicago President Charles Evans will deliver a speech about the economic outlook and monetary policy at the Lake Forest-Lake Bluff Rotary Club 2015 Economic Breakfast in Lake Forest.

At 2:00 pm ET, U.S. Federal Reserve releases Beige Book report.

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