* Canadian dollar at C$1.3378, or 74.75 U.S. cents
* Bond prices higher across a flatter yield curve
TORONTO, March 28 The Canadian dollar weakened
on Tuesday to a nearly two-week low against its U.S. counterpart
before recovering most of its losses as investors braced for a
speech by Bank of Canada Governor Stephen Poloz.
In a news conference after the speech, reporters are likely
to ask Poloz about the Canadian economy's better-than-expected
performance recently. But tame inflation data on Friday
indicated little pressure for a rate hike.
As recently as January, the central bank said an interest
rate cut remained on the table. It last lowered in July 2015 to
leave its policy rate at 0.50 percent.
The central bank will release Poloz's prepared remarks at
9:50 a.m. EDT (1350 GMT), and the governor will hold the news
conference around 11:10 a.m. EDT.
The weaker bias for the loonie came even as prices rose for
oil, one of Canada's major exports.
U.S. crude was up 1.01 percent at $48.21 a barrel,
helped by supply disruption in Libya and the latest comments
from officials suggesting the Organization of Petroleum
Exporting Countries could extend its deal to cut global
At 9:14 a.m. ET (1314 GMT), the Canadian dollar was
trading at C$1.3378 to the greenback, or 74.75 U.S. cents,
slightly weaker than Monday's close of C$1.3376, or 74.76 U.S.
The currency's strongest level of the session was C$1.3374,
while it touched its weakest since March 15 at C$1.3415.
The U.S. dollar steadied against a basket of major
currencies after its worst week since U.S. President Donald
Trump's election in November, helped by promises of more
interest rate increases by the Federal Reserve this year.
Canadian government bond prices were higher across a flatter
yield curve, with the two-year up 2 Canadian cents to
yield 0.719 percent, its lowest since Feb. 8, and the 10-year
rising 25 Canadian cents to yield 1.576 percent.
The 10-year yield fell 1.5 basis points further below its
U.S. equivalent to a spread of -78.4 basis points as Canadian
(Reporting by Fergal Smith; Editing by Lisa Von Ahn)