TORONTO, Feb 24 (Reuters) - The Canadian dollar steadied against its U.S. counterpart on Monday, extending its recent sideways trading pattern, as investors awaited greater clarity on prospects of U.S. trade tariffs and additional easing from the Bank of Canada.
The loonie was trading unchanged at 1.4220 per U.S. dollar, or 70.32 U.S. cents, after moving in a range of 1.4183 to 1.4244.
The currency has recovered from a 22-year low of 1.4793 on February 3 but gains have stalled since mid-month.
Uncertainty about tariffs and the next Bank of Canada policy decision has contributed to "the recent choppy, sideways trading in the currency," said Tony Valente, senior FX dealer at AscendantFX.
Canada and Mexico are expected to intensify efforts this week to avoid punishing 25% tariffs on their exports to the U.S. in talks to persuade President Donald Trump's administration that their steps to increase border security and curb fentanyl trafficking are working ahead of a March 4 deadline.
On Friday, BoC Governor Tiff Macklem said tariffs and subsequent retaliation from Canada could almost wipe out any domestic growth in 2025 and 2026 and cause a one-time spike in inflation.
Investors see a 37% chance that the central bank would cut its benchmark interest rate by a further 25 basis points at a policy announcement on March 12 after the rate was lowered last month to 3%.
Speculators have reduced their bearish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of February 18, net short positions had decreased to 144,643 contracts from 150,834 in the prior week.
The price of oil , one of Canada's major exports, settled 0.4% higher at $70.70 a barrel as investors awaited clarity on talks to end the war in Ukraine.
Canadian bond yields edged lower across the curve. The 10-year was down 1.2 basis points at 3.096%.
German business leaders are urging the new government to move quickly to boost the weak economy.
Reporting by Fergal Smith; Editing by Richard Chang
