Canadian dollar advances as building permits surge
The Canadian dollar extended its gains against the greenback for a second consecutive day after official data on building permits soared above expectations. Monthly building permits, which show the number of permits for new construction projects, advanced 20.7 percent in July following a more than 10 percent decline the previous month. Corporate investment in commercial construction projects reached $8 billion in July, concentrated largely in Ontario, Alberta and Quebec. The positive growth figures reflect the sixth gain in seven months for building permits. Analysts expected a modest gain of 1 percent in July after a dismal June.
Total permits issued in the residential sector increased 4.1 percent to more than $4 billion in July after declining close to 13 percent the previous month, largely due to a prolonged construction strike in Quebec that saw workers walk off the job at the peak of building season. The strike ended July 1 after Quebec’s minority government passed a bill to extend the collective bargaining agreement by one year.
Permit values were up in six of the ten Canadian provinces, led by Ontario, Alberta and Quebec. The biggest drop occurred in the western province of British Columbia as multi-family dwellings and commercial building intensions fell.
The Canadian dollar soared more than 0.3 percent against the greenback, sending USDCAD to a session low of 1.0362 before consolidating at 1.0368. The USDCAD has declined more than 1.7 percent over the previous five days. The pair extended its losses from the Friday session when it was reported the Canadian economy unexpectedly added 59,200 jobs in August. The unemployment rate dropped accordingly from 7.2 percent to 7.1 percent. The pair’s next support level is situated at 1.0337, followed by a strong support line at 1.0282. On the upside, the pair’s first resistance line is 1.0442.
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