CANADA FX DEBT-C$ at 3-week high on robust housing data

Mon Sep 9, 2013 5:08pm EDT

* C$ at C$1.0373 vs US$, or 96.40 U.S. cents
    * Building permits soar 20.7 percent vs expected 1 pct
    * Bond prices rise across the curve

    By Solarina Ho
    TORONTO, Sept 9 (Reuters) - The Canadian dollar touched its
firmest level in almost three weeks against a broadly weaker
U.S. dollar on Monday in the wake of surprisingly strong
Canadian building permits data, which hit a record.
    The U.S. dollar continued to be pressured by a disappointing
U.S. jobs report on Friday. 
    The construction sector was unexpectedly robust in July,
with the number of building permits issued up 20.7 percent, far
surpassing the 1 percent rise economists polled by Reuters had
expected. Most of the gains were for commercial buildings, while
housing saw a more modest rise. 
    "There was a slight uptick for Canada (dollar) strengthening
as we got the building permits data. Most of the time, people
ignore it because it's such a volatile report," said Mark
Chandler, head of Canadian fixed income and currency strategy at
RBC Capital Markets.
    "But within the guts of the report, there was still some
pretty good news on housing. If you look at the unit sales data,
it's the fourth month that we've seen it over 200,000."
    The Canadian dollar ended the session trading at
C$1.0373 versus the U.S. dollar, or 96.40 U.S. cents, stronger
than Friday's North American finish at C$1.0409, or 96.07 U.S.
cents.
    It hit its strongest level since Aug. 20 in afternoon trade.
    "It was a slow grind. That speaks to the fact that a lot of
it is the market digesting the U.S.-dollar negative news from
Friday," said Greg Moore, a foreign exchange strategist at TD
Securities. "The building permits data from Canada did add a
small pop in the Canadian dollar."
    The U.S. dollar weakness followed Friday's U.S. jobs report.
The report spurred more discussion on when the U.S. Federal
Reserve might begin scaling back its stimulus program. 
    With little data on tap both in the United States and Canada
this week, broader currency movements are expected to be
dictated by developments in Syria, said Chandler.
    Prices for Canadian government debt rose across the maturity
curve, with the two-year bond up 2.5 Canadian cents
to yield 1.279 percent and the benchmark 10-year bond
 climbing 22 Canadian cents to yield 2.744 percent.
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