Thursday, July 11, 2013

Housing market fuelling loonie’s rise from two-year-low

The Canadian dollar rose from its lowest level in almost two years before a report Tuesday forecast to show the pace of home construction in June stayed above the year-to-date average for the second month in a row.

The currency strengthened against the majority of its most-traded counterparts along with those of its commodity-exporting peers after Canadian building permits rose for a fifth straight month. A report Tuesday will show work began on 188,000 homes in June compared with 200,178 the month before, according to a Bloomberg survey of 21 economists. This year Canada has averaged 179,400 new homes each month.

“The data itself is more of a reassurance of the theme of a soft landing that we expect to see in the housing market,” said Mazen Issa, Canada macro strategist at Toronto-Dominion Bank’s TD Securities, by phone from Toronto. “We’ll probably see that filter into the housing-starts data.”
The loonie, as the Canadian dollar is known, rose 0.3% to $1.0553 per U.S. dollar at 10:17 a.m. in Toronto. The loonie touched $1.0609 per U.S. dollar July 5, the weakest since October 2011. One loonie buys 94.76 U.S. cents.

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