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(Recasts with comments from Poloz press conference)
By Allison Lampert
DRUMMONDVILLE, Quebec, Sept 16 (Reuters) - Recent Canadian economic data has been encouraging, particularly on exports, Bank of Canada Governor Stephen Poloz said on Tuesday, but he pointed to a substantial amount of slack in the job market.
His remarks followed a speech in which he said the central bank does not try to manipulate the value of the Canadian dollar or even guide currency markets, a stance that he said gives it the freedom to opt out of matching U.S. interest rate hikes.
While the Canadian dollar edged higher following the speech and press conference, market watchers were left with the impression that the central bank is in no hurry to shift out of its officially neutral policy, which means its next interest-rate move could be either a hike or a cut.
Poloz said there is a lot to be done before all the ingredients of a recovery are in place and that new data will be given "full consideration" in the central bank's next quarterly review of the economy, the Oct. 22 Monetary Policy Report.
But he made clear the Bank of Canada would not feel compelled to match eventual U.S. rate hikes if the Canadian economy is not ready for such moves.
"Our timing is our timing. The interest rates in Canada are already 1 percent; that's already quite a bit above what the U.S. rate is," Poloz said. "So there is some room to talk about where we should be going when the time is right and when the rest of the macro story is coming together."
Poloz has repeatedly stressed the need for exports to take over from consumers as the main driver of growth, a move that would be followed by investment and hiring by companies.
"It looks like the natural sequence we've been hoping for is getting under way," he said in his speech.
He tempered that view, which he described as cautious optimism, with the fact that it will take time for hiring to materialize and even more time for slack in the job market to be soaked up.
For instance, the bank believes that about 200,000 youth have withdrawn from the labor force, with another 100,000 adults also discouraged.
"But if we generate 10,000 or 15,000 jobs per month in a good expansion, if there (are) 200,000 or 300,000 people who are discouraged, that's lots of room to grow," he said later.
Many analysts have suggested Poloz, the former head of Export Development Canada, prefers a weak currency in order to boost exports. The Canadian dollar has fallen 7 percent against the U.S. greenback since he took office in June 2013.
But in his first speech on the currency since taking the helm, he insisted that trying to target a level for the Canadian dollar risks creating "larger fluctuations in unemployment, output and inflation, and in the end would not help us maintain our international competitiveness".
Outlining a scenario in which the U.S. economy is picking up speed and the Canadian economy is lagging - a scenario that resembles current conditions - he said that if the bank were trying to hold its currency constant it would probably have to match U.S. rate increases in lock step.
"But doing so would risk pushing our inflation rate back below our target," he said. "Attempting to control the exchange rate would mean giving up our independent monetary policy."
In his current economic analysis, he stressed that while energy and non energy exports have been picking up and other indicators look positive, "I'd remind you that they've been encouraging several times over the last five years. What happens next still is a question mark for us."
"Europe is obviously the biggest question mark," he said. (Writing by Randall Palmer; Additional reporting by David Ljunggren in Ottawa and Leah Schnurr, Solarina Ho, Andrea Hopkins and John Tilak in Toronto; Editing by Peter Galloway and Jeffrey Hodgson)