THE TAKEAWAY:[Canadian Existing Home Sales dip in October] > [Tighter lending conditions have come into effect] > [USD/CAD BEARISH]
Canadian Existing Home Sales dropped in October, adding to signs that Canada’s real estate sector has started to contract. According to the Canadian Real Estate Association, home sales activity weakened in October to 36,492 units sold, from 36,545 units a month ago. However in the capital Toronto, sales of real estate stayed at a faster growth rate of +1.5% in October. Meanwhile, average prices, seasonally adjusted, had risen by +0.1% from the preceding month.
In October, both homebuyers and mortgage lenders continue experiencing tightening conditions set by the Canadian government, aiming to deflate a possible housing bubble before it bursts. Today’s data suggests that the pace of housing starts has already been slowed as tighter lending conditions remain in effect.
USD/CAD 1-minute Chart: November 15, 2012
Charts Created using Marketscope – Prepared by Renee Mu
In the minutes after Canadian Existing Home Sales report was released, the Canadian dollar gained further against the USDollar. As can be seen on the 1-minute chart, the USD/CAD declined to 1.0014 from 1.0021 within five minutes of the release. At the time this report was written, the USD/CAD pair was trading around 1.0014.
--- Written by Renee Mu, DailyFX Research