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Loonie trades in a range of 1.3928 to 1.4007

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Price of U.S. oil settles 3.2% lower

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10-year yield falls 11.1 basis points

By Fergal Smith

TORONTO, Nov 25 (Reuters) - The Canadian dollar steadied

against its U.S. counterpart on Monday as the bond market's

enthusiasm about the choice of U.S. Treasury secretary offset a

drop in oil prices and caution ahead of comments by a Bank of

Canada policymaker.

The loonie was trading nearly unchanged at 1.3978 per

U.S. dollar, or 71.54 U.S. cents, after moving in a range of

1.3928 to 1.4007. Last week, the currency rallied 0.8%, its

biggest weekly gain since August.

"There are some factors netting each other out," said Darren

Richardson, chief operating officer at Richardson International

Currency Exchange Inc.

U.S. Treasury yields declined sharply and the U.S. dollar

gave back some recent gains against a basket of major

currencies as investors bet that the nomination of Scott Bessent

as U.S. Treasury secretary would lead to a more moderate than

feared U.S. fiscal trajectory.

The price of oil, one of Canada's major exports,

settled 3.2% lower after multiple reports that Israel and

Lebanon had agreed to the terms of a deal to end the

Israel-Hezbollah conflict.

Bank of Canada Deputy Governor Rhys Mendes is due to speak

on Tuesday on monetary policy, the last scheduled appearance by

a BoC policymaker before the Dec. 11 interest rate decision.

"Any information will be dissected by the market,"

Richardson said, adding that hotter-than-expected Canadian

inflation data last week has cooled expectations for another

outsized interest rate cut from the central bank next month.

Still, speculators have raised their bearish bets on the

Canadian dollar to the highest level since July, data from the

U.S. Commodity Futures Trading Commission showed. As of Nov. 19,

net short positions had edged up to 183,566 contracts from

182,389 in the prior week.

Canadian bond yields tracked U.S. Treasury yields lower. The

10-year was down 11.1 basis points at 3.316%.

(Reporting by Fergal Smith; Editing by Aistair Bell)