Canadian dollar rises on building permits data

Wed Feb 6, 2008 9:49am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By John McCrank

TORONTO (Reuters) - The Canadian dollar rose against the U.S. dollar on Wednesday after building permits data for December beat market expectations, highlighting the continued strength of the domestic economy.

Domestic bond prices fell as the data helped support the view that while a U.S. slowdown may hurt Canadian economic growth, strong domestic demand may soften the blow.

At 9:34 a.m. (1434 GMT), the Canadian dollar was at C$1.0036 to the U.S. dollar, or 99.64 U.S. cents, up from C$1.0072 to the U.S. dollar, or 99.29 U.S. cents at Tuesday's close.

"The building permits data came in much stronger than expected, confirming the stark difference between the Canadian housing market and the U.S. housing market," said Matthew Strauss, senior currency strategist at RBC Capital Markets.

The value of Canadian building permits increased by 0.4 percent in December over November, said Statistics Canada. Market analysts had on average predicted a flat reading.

For the year, the value of permits issued rose 12.1 percent to a record C$74.26 billion.

Still to come on the data front, the Ivey Purchasing Managers Index for January is due later in the session.

Last month showed a contraction in purchasing activity in Canada for the first time since December 2006, prompting investors to sell the Canadian dollar.   Continued...

<p>Newly pressed Canadian one dollar coins, also know as loonies, at the Royal Canadian Mint in Winnipeg on November 14, 2007. REUTERS/Fred Greenslade</p>