* Euro holds steady as investors await likely dovish ECB
* Canadian dollar climbs after BOC sees market risks abating
* Higher oil, metal prices boost commodity currencies
* Euro rebounds from one-week low versus yen
(Updates with late U.S. action)
By Richard Leong
NEW YORK, March 9 (Reuters) - The euro held steady on
Wednesday in choppy trading as investors awaited a European
Central Bank meeting, which they expect will result in interest
rates falling deeper into negative territory and more bond
purchases to help the euro zone economy.
The Canadian dollar jumped after the Bank of Canada left
policy rates unchanged and said its economic outlook was largely
the same as in January as recent market volatility "appears to
be abating."
A rebound in oil and metal prices also rekindled bids for
the Canadian dollar and other commodity-sensitive currencies
including the Australian and New Zealand dollars.
Still, the ECB meeting on Thursday is seen as the marquee
event for the currency market this week.
Greg Anderson, global head of FX strategy at BMO Capital
Markets in New York, said the market was trading "nervously
ahead of the ECB meeting."
The ECB is expected to cut the deposit rate by 10 basis
points to -0.40 percent, announce more asset purchases and
possibly introduce tiered interest rates like the Bank of Japan
in a bid to boost inflation, according to a Reuters poll
published on Monday.
More ECB stimulus would put downward pressure on the euro
but analysts have said ECB policymakers may not deliver the
levels of easing traders expect.
The euro fell to a one-week low against the yen before
turning higher. It was last up 0.6 percent at 124.76 yen
EURJPY= .
The single currency was little changed at $1.1008, erasing
an earlier 0.6 percent fall against the greenback EUR= .
The euro's turnaround, together with higher oil and
industrial metals prices, erased the dollar's initial gains.
The dollar index .DXY , which measures the greenback
against the euro, yen and four other currencies, dipped 0.1
percent to 97.112.
In London, benchmark Brent crude LCOc1 was up 3 percent at
$40.95 a barrel and copper futures CMCU3 ended 1.1 percent
higher at $4,922.50 a tonne.
With oil Canada's biggest export, the loonie hit a
3-1/2-month peak against the dollar, last trading 1.2 percent
stronger at C$1.3253 CAD=D4 .
Elsewhere in the dollar bloc, the Kiwi was up 0.6 percent at
$0.6782 NZD=D4 ahead of a New Zealand central bank meeting on
Thursday. While markets imply a small chance of a rate cut,
investors suspect it is only a matter of time before the central
bank delivers another cut to the 2.5 percent cash rate.
RBNZWATCH
The Aussie dollar AUD=D4 was up nearly 1 percent at
$0.7511 after reaching an eight-month high versus the greenback.