Loonie Climbs on Fastest Pace in Housing Starts in March Since October 2008
THE TAKEAWAY: [Canadian housing starts accelerate in March to fastest since October 2008] > [Rural and urban multi-family starts soar] > [CAD strengthens]
Housing starts in Canada unexpectedly accelerated in March to its fastest pace since October 2008. The Canada Mortgage and Housing Corporation reported 215,600 housing starts in March, while February’s figure was revised upwards to 205,300 from 201,100. The consensus call of 18 economists surveyed by Bloomberg News had called for a slowdown to 200,000 housing starts in March. New starts climbed 17.2 percent in March from a year ago, compared with February’s year-on-year rate of 14.1 percent.
The pickup in housing starts in March was led by multi-family homes in urban areas, which recorded a 8.3 percent gain to 124,100 new starts. Meanwhile, housing starts in rural areas soared by 11.9 percent from a month ago, reversing the 1.4 percent contraction in February.
The recent strength shown by the Canadian housing market had prompted Canada’s Finance Minister Jim Flaherty’s comments to reporters yesterday that there had been some moderation in the housing market recently, and that he had no current plans to intervene in what some analysts think is a housing bubble.
USDCAD 1-minute Chart: April 11, 2012
Chart created using Strategy Trader – Prepared by Tzu-Wen Chen
The significantly stronger-than-expected print boosted the Canadian dollar, which soared by as much as 12 pips against the U.S. dollar in the first 15 minutes following data release. At the time of this report, the loonie had retraced somewhat, but was trading stronger at C$1.0017 to the U.S. dollar.
--- Written by Tzu-Wen Chen DailyFX Research
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