March 13, 2018 / 1:27 PM / 6 months ago

CANADA FX DEBT-Canadian dollar steady against greenback before Poloz speech

    * Poloz speech on labor market in focus
    * U.S. headlines provoke choppy trading

    By Karen Brettell
    NEW YORK, March 13 (Reuters) - The Canadian dollar was
little changed on the day against the greenback on Tuesday,
though trading was choppy on U.S. data and political headlines,
as investors prepared for a speech by Bank of Canada Governor
Stephen Poloz.
    Poloz’s speech comes after the central bank held interest
rates steady last week as expected, while a speech from Deputy
Governor Tim Lane on Thursday stuck to the bank's dovish message
that it will be cautious in considering further increases.
            
    With a focus on the labor market, Poloz is likely to talk
about long-term trends and may not speak about current monetary
policy, though he will field questions after the talk.
    “It’s something quite specialized, maybe longer-term in
nature, it’s not something that maybe lends itself to any
particular reference to the current outlook for monetary
policy,” said Shaun Osborne, chief currency strategist at
Scotiabank in Toronto.
    The central bank is also seen as unlikely to have changed
its thinking on monetary policy so soon after its last meeting.
    The loonie was nonetheless volatile against the U.S. dollar
after data showed that U.S. consumer prices cooled in February
and after U.S. President Donald Trump said he was replacing U.S.
Secretary of State Rex Tillerson with Central Intelligence
Agency Director Mike Pompeo.                          
    “It’s all about external drivers of the CAD at the moment I
think, rather than internal drivers,” said Osborne.
    At 9:13 a.m. EST (1301 GMT), the Canadian dollar         
was trading 0.05 percent lower at C$1.2833 to the greenback.
    The loonie has weakened amid improved risk appetite and
after Trump said Canada and Mexico would be exempt from tariffs
on steel and aluminum as long as talks to update the North
American Free Trade Agreement progressed (NAFTA).             
    Benchmark 10-year Canadian government bond yields
            fell to 2.22 percent, from 2.24 percent late Monday.

 (Editing by Jonathan Oatis)
  
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