THE TAKEAWAY: [Canada housing starts dropped more than expected in November] > [Homebuilding continued slowdown amid tighter conditions] > [USD/CAD mixed]
Housing starts in Canada declined more than expected in November because of slowdowns in residential construction in both urban and rural areas. The Canada Mortgage and Housing Corporation reported today that housing starts fell to 196,100 on a seasonally adjusted annual basis in November, the fourth decline since August. The dwelling body revised its figure for October downwardly to 203,500 from 204,100 initially reported. The median forecast of economist surveyed by Bloomberg News had called for 200,000 housing starts in November.
Multiple-unit starts in urban areas contributed the most to the drop in housing starts, falling 4.0 percent to 174,323, and single-family starts declined 3.2 percent to a pace of 115,717. Today’s data suggests that the pace of housing starts continued to slow down and is likely to keep contracting over the next few months, due to the introduction of tighter federal regulations in Canada’s mortgage market.
USD/CAD 1-minute Chart: December 10, 2012
Trading of the Canadian dollar was mixed against the U.S. dollar in the minutes following the release of the housing data. At the time this report was written, the USD/CAD pair was trading at C$0.9879.
--- Written by Renee Mu, DailyFX Research