Canada Markets closed

Canadian dollar steady against greenback before Poloz speech

U.S. and Canada Dollar notes are seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration

By Karen Brettell

NEW YORK (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)