Strong Housing Starts Unable to Lift the Canadian Dollar
The Canadian dollar was on the defensive Monday, as the forex market continued to favour the US dollar following last week’s jobs reports.
The USDCAD pair rose to its highest level in more than a week, despite stronger than forecast Canadian housing starts. Canadian housing starts rebounded strongly in February, reaching a seasonally adjusted pace of 192,100, the Canadian Mortgage and Housing Corporation reported today. February marked the first time since October that housing starts increased from the previous month.
The USDCAD rose to an intraday high of 11.2900. As of 17:15 GMT, the pair was trading at 1.1100, a gain of 0.1 percent. Technical resistance is likely to be met at 1.1159. Above this level, resistance is likely to be found at 1.1187 and 1.1215. On the support side, key levels include 1.1034, 1.1006 and 1.0979.
Statistics Canada is scheduled to report on capacity utilization and new housing prices later this week. The US government will report on retail sales, business inventories and producer price inflation. Reuters and the University of Michigan will also co-release the monthly Consumer Sentiment Index.
Recent data suggest the Canadian economy is expanding faster than forecast, although the labour market continues to drift sideways. The Canadian economy employed 7,000 fewer workers last month, Statistics Canada reported last week. This follows a 29,400 growth pace in January. Canada’s gross domestic product increased 2.9 percent annually in the fourth quarter and 2 percent in all of 2013,
The Canadian government announced in its budget last month it expects the loonie to rise to 95 cents in 2015.
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