After dropping against the US Dollar on Friday in the wake of poor Canadian unemployment figures, the ‘Loonie’ was able to advance following the release of some more positive domestic data.
The Canadian Dollar Exchange Rate was in the region of 0.9857 against the US Dollar as of 14:25 pm GMT
According to the latest reports Canadian housing starts were up slightly from February’s 183,207 units, coming in at a seasonally adjusted 184,028 in March.
The figure was significantly higher than the 175,000 estimate, and February’s number was also upwardly revised from a previously reported 180,719.
Although this news is positive, particularly given Friday’s shocking employment data which showed an unexpected job loss of 54,500, industry experts remain cautious.
For, as CIBC economist Emanuella Enenajor comments, ‘While the 184,000 pace marks an improvement from the winter lull, it is still well below the pace seen late last year and continues to point to an overall deceleration in homebuilding. Indeed, on an annual basis, starts are down 13.6 per cent from year-ago levels.’
Meanwhile, a separate report revealed that Canadian building permits rose by less-than-anticipated in February. Although permits increased by 1.7 per cent (following a gain of 1.8 per cent the previous month) the figure was far less than the 4.3 per cent advance anticipated.
A steep drop in plans for multifamily housing was largely attributed as the cause of the lacklustre result.
However, the Canadian Dollar was also supported by tame Chinese inflation data, which gave commodity prices a boost.
A government report showed that in March China’s consumer prices increased at a rate of 2.1 per cent, significantly lower than February’s rate of 3.2 per cent. The official target rate for 2013 is 3.5 per cent.
Meanwhile, China’s wholesale prices dropped by 1.9 per cent from the same period of last year.
These results give Chinese policy makers a bit more wiggle room when it comes to adopting additional growth-stimulating measures and caused the price of oil and metals to rise.
The commodity-driven ‘Loonie’ climbed by 0.23 of a Cent following the release of Canadian housing starts and building permits figures, trading in the region of 98.53 US Cents.
The next Canadian data of interest is Thursday’s New Housing Price Index.
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