‘Loonie’ A Non Mover After Housing Starts

The Canadian dollar was little changed against its U.S. counterpart after a report showed December housing starts exceeded forecasts.

Construction starts were 198,000 at a seasonally adjusted annual pace last month, Ottawa-based Canada Mortgage & Housing Corp. said on its website today. Economists forecast a reading of 195,000 according to the median of 22 responses to a Bloomberg News survey. The currency has strengthened since the U.S. passed a budget deal last week to avoid automatic austerity measures pending more votes as the nation approaches its borrowing limit.

“In terms of the long-term fundamentals for the Canadian dollar, it’s good for the Canadian economy,” David Doyle, a strategist at Macquarie Capital Markets, said by phone from Toronto. “It’s better if our housing market slows and new construction slows. It means the Bank of Canada won’t be forced to tighten policy too aggressively, which is positive for the overall economy.”

The Canadian dollar, called the loonie for the image of the aquatic bird on the C$1 coin, fell 0.1 percent to 98.78 cents per U.S. dollar at 8:29 a.m. in Toronto, after weakening as much as 0.2 percent. One loonie buys $1.0127.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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Dean Popplewell

Dean Popplewell

Director of Currency Analysis and Research at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2007, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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