TORONTO: The Canadian dollar rose against its broadly weaker US counterpart on Wednesday, but gave up much of its gains as expectations rose that the Bank of Canada would cut interest rates this year amid concerns over global trade wars.

The Bank of Canada held its benchmark interest rate steady at 1.75% on Wednesday and raised its second-quarter growth forecast as expected while highlighting the risks that trade wars posed to the global economy.

Still, the chances of a rate cut this year by the central bank by December climbed to 35% from about 20% before the rate decision, data from the overnight index swaps market indicated.

Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins will hold a press conference at 11:15 ET (1515 GMT).

At 10:50 a.m. (1450 GMT), the Canadian dollar was trading 0.2% higher at 1.3111 to the greenback, or 76.27 US cents. The currency's strongest level of the session was 1.3070, while it touched its weakest since July 1 at 1.3145.

Meanwhile, the US dollar fell against a basket of major currencies after Federal Reserve Chairman Jerome Powell struck a downbeat tone in congressional testimony, saying trade uncertainties and concerns about the global outlook continued to exert pressure on the US economy.

The price of oil, one of Canada's major exports, was boosted by industry data showing US inventories fell more than expected, while major US producers evacuated rigs in the Gulf of Mexico before a storm. US crude oil futures were up 2.9% at $59.50 a barrel.

Canadian government bond prices were higher across the yield curve, with the two-year up 9 Canadian cents to yield 1.591% and the 10-year rising 5 Canadian cents to yield 1.579%.

Earlier in the session, the 2-year yield touched its highest since May 24 at 1.624%.