CANADA FX DEBT-Canadian dollar dips as risk aversion offsets BoC case against easing further

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Canadian dollar falls 0.1% against the greenback

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Trades in a range of 1.3653 to 1.3699

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Price of oil settles 2.8% lower

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Canadian yields ease across the curve

By Fergal Smith

TORONTO, Feb 5 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Thursday as investors ?grew risk averse, but the move was limited after Bank of Canada Governor Tiff Macklem pushed back against ?prospects of additional interest rate cuts to support the economy.

The loonie was trading ?0.1% lower at 1.3675 per U.S. dollar, or 73.13 U.S. ?cents, after moving ?in a range of 1.3653 to 1.3699. The U.S. dollar touched a near two-week high as fresh volatility gripped ?Wall Street.

Restructuring the Canadian economy to ?cope with U.S. tariffs, slower population growth and the rise of artificial intelligence will take years, and could be very painful, Macklem said.

"Governor ?Macklem essentially said his hands were ?tied in addressing ?the economic weakness he believes has been caused by the structural change underway," Royce Mendes, head of macro strategy at Desjardins, said in a ?note. "In his view, cutting interest rates further would only stoke excess inflation, as aggregate demand would bump up against the reduced productive capacity of the economy." The BoC has lowered its benchmark interest rate to 2.25%, which is the low end of the 2.25%-3.25% range the central bank estimates as neutral, or the ?level ?that neither stimulates nor restricts economic activity. Investors are leaning toward the next move being a hike. 0#CADIRPR The Canadian dollar is expected to give ?back some recent gains over the coming months, but the currency could then reestablish its uptrend if the BoC shifts to raising rates and the greenback faces broad-based selling pressures, according to a Reuters poll.

Canadian employment data for January, due on Friday, could provide more clues on the monetary policy outlook. Analysts forecast a jobs gain of 5,000. The price ?of oil, one of Canada's major exports, settled 2.8% lower as concerns eased around Iranian crude supplies.

Canadian bond yields moved lower across a flatter curve, tracking moves in U.S. Treasuries. The 10-year ?was down 3.7 basis points at 3.408%. (Reporting by Fergal Smith; Editing by Will Dunham)