The Canadian dollar was little changed against its U.S. counterpart after a report showed December housing starts exceeded forecasts.
Construction starts were 198,000 at a seasonally adjusted annual pace last month, Ottawa-based Canada Mortgage & Housing Corp. said on its website today. Economists forecast a reading of 195,000 according to the median of 22 responses to a Bloomberg News survey. The currency has strengthened since the U.S. passed a budget deal last week to avoid automatic austerity measures pending more votes as the nation approaches its borrowing limit.
“In terms of the long-term fundamentals for the Canadian dollar, it’s good for the Canadian economy,” David Doyle, a strategist at Macquarie Capital Markets, said by phone from Toronto. “It’s better if our housing market slows and new construction slows. It means the Bank of Canada won’t be forced to tighten policy too aggressively, which is positive for the overall economy.”
The Canadian dollar, called the loonie for the image of the aquatic bird on the C$1 coin, fell 0.1 percent to 98.78 cents per U.S. dollar at 8:29 a.m. in Toronto, after weakening as much as 0.2 percent. One loonie buys $1.0127.
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