Prices of oil, one of Canada's major exports, were lifted by declining US crude inventories, although markets were still restrained by excess supply.

US crude prices were up 0.19 percent to $47.64 a barrel.

The United States, Canada and Mexico are due to kick off NAFTA talks later in the day. The biggest uncertainty is whether a deal can pass President Donald Trump's "America First" test.

At 9:05 a.m. ET (1305 GMT), the Canadian dollar was trading at C$1.2722 to the greenback, or 78.60 US cents, up 0.3 percent.

The currency traded in a range of C$1.2712 to C$1.2770.

On Tuesday, the loonie hit its lowest level since July 12 at C$1.2778, pressured by broader gains for the greenback as North Korea tensions eased and data showed a jump in US retail sales.

Foreign investors sold a net C$923 million ($724.83 million) in Canadian securities in June after buying C$29.44 billion in securities in May, Statistics Canada said. It was the first monthly divestment since July 2015.

Canadian government bond prices were mixed across the yield curve, with the two-year price up 0.5 Canadian cent to yield 1.241 percent and the 10-year falling 3.5 Canadian cents to yield 1.912 percent.

Canada's inflation data for July is due on Friday.