Loonie Dips Despite Bounce in Canadian Housing Starts in June
THE TAKEAWAY: [Housing starts in Canada unexpectedly rises in June] > [Housing construction still expected to slow] > [CAD weakens]
Housing starts in Canada unexpected rose in June, with the Canada Mortgage and Housing Corporation reporting a jump to 222,700 housing starts at a seasonally adjusted annual pace in June, following a temporary slowdown in housing starts in May. The housing body revised May’s figure up to 217,000 from 211,400 originally reported. The median forecast of 21 economists surveyed by Bloomberg News had called for a further slowdown to 205,000 housing starts in June. New starts climbed 13.5 percent in June from a year ago, compared with May’s year-on-year rate of 14.5 percent.
The pickup in housing starts in June was boosted by a jump in multi-family homes in urban areas, which recorded a 4.1 percent gain to 132,000 new starts, after declining 19.7 percent the month before.
USDCAD 1-minute Chart: July 10, 2012
Chart created using Market Scope – Prepared by Tzu-Wen Chen
In the minutes after the housing report was released, the Canadian dollar initially fell against the U.S. dollar, losing as much as 19 pips. However, the ensuing market correction saw the loonie erase the initial decline, and at the time of this report was trading near pre-data levels at C$1.01819.
--- Written by Tzu-Wen Chen, DailyFX Research