US Housing Starts Increases; USDCAD Rallies
THE TAKEAWAY: [Housing starts in U.S. rose 0.8% in February; Building permits increased 4.6% ] > [Record-low borrowing costs and stable property prices help boost housing construction activity] > [USD/CAD Bullish]
U.S. New housing construction and applications and building permits in February increased to their highest levels in nearly 5 years, signaling that the housing sector is picking up at a stable pace. According to a report released jointly by the U.S. Consensus Bureau and the Department of Housing and Urban Development today, the number of privately-owned housing starts accelerated by 0.8 percent to a seasonally adjusted annual rate of 917,000 in February, following 910,000 housing starts the previous month that was upwardly revised from 890,000 originally reported. The latest print comes in well above the median estimate of 915,000 housing starts according to a Bloomberg News survey.
Meanwhile, building permit approvals rose 4.6 percent to an annual rate of 946,000 in February from a downwardly revised reading of 904,000 in January. The consensus estimate of 91 economists surveyed by Bloomberg News had projected a rise to 925,000 approvals.
With close to record low mortgage rates and increased property value, housing market has gain more confidence in U.S. The better-than-expected reports indicate that the improving housing market helps boost the economy and provide supports to maintain stable growth in coming months.
USDCAD 1-minute Chart: March 19, 2013
Chart created using Marketscope 2.0– Prepared by Renee Mu
In the minutes following the data release, the U.S. dollar rallied against the major currencies, with USDCAD rising 10 pips to C$1.0243. As the market gains confidence, the greenback extended advance after the report. At the time of this report was written, the USDCAD was trading higher at C$1.0250.
--- Written by Renee Mu DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.