(Adds details on activity; updates prices)
    * Canadian dollar rises 0.2% against the greenback
    * Bank of Canada leaves policy rate on hold at 0.25%
    * Price of U.S. oil settles 0.7% higher
    * Canada's 10-year yield falls 3.7 basis points to 1.409%

    By Fergal Smith
    TORONTO, March 10 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Wednesday as oil prices
rose, and after the Bank of Canada said the economy was stronger
than expected but stopped short of adjusting forward guidance on
interest rates and bond purchases.
    The central bank revised to positive its outlook for GDP
growth in the first quarter, saying Canada's economy was proving
more resilient to a second wave of COVID-19 than expected.
             
    Still, it left its benchmark interest rate unchanged at a
record low of 0.25% and said it would stay there until economic
slack is absorbed, which in its January projection does not
happen until into 2023. 
    The market has been betting that the BoC would tighten as
soon as next year, with the first hike coming ahead of the
Federal Reserve.             
    "We don't see that in the data and it would be to the Bank
of Canada's detriment to go first because it would make the
currency stronger," said Darcy Briggs, a portfolio manager at
Franklin Templeton Canada.
    "That doesn't help our case. That's a tightening of
financial conditions, given that we are supposed to be relying
on exports as a growth driver."
    The Canadian dollar        was trading 0.2% higher at 1.2615
to the greenback, or 79.27 U.S. cents, having traded in a range
of 1.2613 to 1.2683. Last month, the loonie touched a three-year
high at 1.2464.
    Data showing tame U.S. underlying inflation boosted Wall
Street, while the price of oil, one of Canada's major exports,
was supported by an upbeat forecast for global economic
recovery. U.S. crude        prices settled 0.7% higher at $64.44
a barrel.                                     
    Canadian government bond yields eased across much of the
curve, with the 10-year             down 3.7 basis points at
1.409%. On Monday, it touched its highest level since January
2020 at 1.545%.

 (Reporting by Fergal Smith in Toronto; Editing by Matthew Lewis
and Peter Cooney)