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By Fergal SmithTORONTO, Oct 21 (Reuters) - The Canadian dollar steadied near a four-week high against its US counterpart on Wednesday as investors stuck with bets the Bank of Canada would raise interest rates at a policy decision next week.The loonie was barely changed at 1.4050 per US dollar, or 71.17 US cents, after touching on Tuesday its strongest intraday level since September 22 at 1.4030.* "The broader move reflects a combination of a softer USD and a more hawkish Bank of Canada," said Tony Valente, senior FX dealer at AscendantFX.* On Saturday, Bank of Canada Governor Tiff Macklem said the central bank expects to raise its quarterly inflation forecast significantly this month owing to persistently high crude oil and petroleum product prices.* Investors see a roughly 80% chance the BoC raises its benchmark interest rate by 25 basis points to 2.50% on October 28.* "Although expectations for a BoC rate hike have increased, the outlook remains uncertain," said Valente, adding that uncertainty around trade relations between the US and Canada is a significant headwind for Canadian economic growth and the loonie.* Canada and the province of Ontario unveiled a C$9 billion joint support package to help the steel and auto sectors deal with US tariffs and also boost critical mineral supply chains.* Canadian retail sales data for August, due on Friday, could offer clues on the state of the domestic economy. Analysts expect sales to rebound 1.3% after falling 0.7% in July.* The price of oil, one of Canada's major exports, fell on Wednesday as investors weighed possible progress toward Russia-Ukraine talks against declining US oil stocks.* US crude oil futures were down 0.9% at $96.98 a barrel, while the US dollar edged 0.1% lower against a basket of major currencies.* Canadian government bond yields eased across the curve, with the 10-year down 2.6 basis points at 3.867%.(Reporting by Fergal Smith; Editing by Nia Williams)
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