CANADA FX DEBT-C$ firms as Canada housing starts beat forecast

Mon Jun 9, 2014 9:54am EDT

* Canadian dollar at C$1.0917 or 91.60 U.S. cents
    * Bond prices lower across the maturity curve

    By Solarina Ho
    TORONTO, June 9 (Reuters) - The Canadian dollar was
marginally stronger than its U.S. counterpart on Monday after
data showed Canadian housing starts came in ahead of
expectations in May, but market moves were muted ahead of what
looked like a quiet week.
    A report from Canada Mortgage and Housing Corp showed
seasonally adjusted annualized housing starts rose to 198,324
last month, while April was revised higher to 196,687 units.
Analysts had forecast 185,000 for May.
    The stronger data suggested housing will contribute to
economic growth in the second quarter after an unusually frigid
winter put a chill on construction. 
    "(The Canadian dollar was) a little bit better ... Housing
starts helped a little bit," said Benjamin Reitzes, senior
economist and foreign exchange strategist at BMO capital
Markets. "This is going to be a quiet week overall for every
market, currency markets as well, after pretty solid action last
week."
    At 9:38 a.m. EDT (1339 GMT), the Canadian dollar 
was outperforming most of its counterparts. It was at C$1.0917
to the greenback, or 91.60 U.S. cents, up from Friday's close of
C$1.0930, or 91.49 U.S. cents.  
    Reitzes noted that if yields, particularly U.S. Treasury
yields, continue to rise, it could weigh on the Canadian dollar
as higher U.S. yields attract flow to the greenback.
    Canadian government bond prices were lower across the
maturity curve, with the two-year down 1 Canadian
cent to yield 1.067 percent, and the benchmark 10-year
 off 9 Canadian cents to yield 2.332 percent.

 (Reporting by Solarina Ho; Editing by Peter Galloway)
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