3 Min Read
* C$ at C$1.0526 vs US$, or 95 U.S. cents * June housing starts topped expectations at 199,586 units * Markets await Bernanke speech on Wednesday * Bond prices mixed By Solarina Ho TORONTO, July 9 (Reuters) - The Canadian dollar firmed against the U.S. dollar on Tuesday, helped in part by stronger-than-expected domestic housing data and firmer oil prices. The seasonally adjusted annualized rate of housing starts was 199,586 units in June, a decrease from May, which was revised higher to 204,616. Analysts polled by Reuters had expected 187,000 starts in June. "It helped early on. But (the housing market) remains too strong. At some point, there needs to be a correction," said Charles St-Arnaud, economist and currency strategist in New York with Nomura Securities. Crude oil prices finished the day with moderate gains, supported in part by worries that violence in Egypt could ignite conflict in the broader Middle East. The Canadian dollar, which was mostly outperforming other major currencies, finished its North American session at C$1.0526 versus the greenback, or 95 U.S. cents. It closed on Monday at C$1.0560, or 94.70 U.S. cents. The U.S. dollar rallied to a three-year high against major currencies on Tuesday on expectations the Federal Reserve will reduce stimulus at a time when other major central banks are likely to ease further. Trading was subdued overall, however, as markets await a speech by U.S. Federal Reserve Chairman Ben Bernanke on Wednesday. Investors are keen for any indication of when the Fed will begin reining in its stimulus. Current expectations are for sometime this fall. "Everything Bernanke says is critically important to the market these days," said Blake Jespersen, managing director, foreign exchange sales, at BMO Capital Markets. "We're seeing a lot of participants waiting for his statement on Wednesday before putting on much trading activity. "In Canadian dollar terms, we do expect some more weakness, but it already has moved quite a bit now and we think it is trying to find somewhat of a bottom around these levels," Jespersen added. He said C$1.05 to C$1.0650 appears to be the range for the Canadian dollar over the next little while. Prices for Canadian government debt were mixed, with the two-year bond adding 3 Canadian cents to yield 1.147 percent and the benchmark 10-year bond flat with a yield of 2.474 percent.