CANADA FX DEBT-C$ strengthens after domestic housing data

Wed Sep 9, 2009 8:58am EDT
 
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 * C$ at C$1.0783 to the U.S. dollar, or 92.74 cents
 * Rosier-than-expected housing data lifts currency
 TORONTO, Sept 9 (Reuters) - The Canadian dollar CAD
CAD=D3 nudged higher against the greenback on Wednesday after
rosier-than-expected domestic housing starts data reassured
investors about the pace of economic recovery.
 Canadian housing starts rose 12.1 percent in August from
July, beating expectations, largely lifted by big gains in
construction of condos and apartments. [ID:nN09322143]
 "It's further confirmation that a slow recovery is underway
in the housing market," said Matthew Strauss, senior currency
strategist at RBC Capital Markets.
 Shortly after the data's release at 8:15 a.m. (1215 GMT),
the Canadian dollar touch a session high of C$1.0759 to the
U.S. dollar, or 92.95 cents, up from its pre-data level around
C$1.0802 to the U.S. dollar, or 92.58 U.S. cents.
 However, the data was only part of the reason behind the
move.
 "The data supported the move but the extent of the move was
not all driven by the better-than-expected data. The fact that
it broke through yesterday's close also played a role. There
was some technical momentum," added Strauss.
 At 8:42 a.m., the unit was at C$1.0783 to the U.S. dollar,
or 92.74 cents, up slightly from C$1.0794, or 92.64 U.S. cents
at Tuesday's close.
 The currency was also supported by steady prices for gold
XAU=[GOL/] and U.S. crude futures CLc1[O/R]. Canada is a
major exporter of commodities, the prices of which often
influence the value of its currency.
 On Tuesday, the unit hit a five-week high against a
faltering U.S. dollar, helped by rallies in commodity prices
and equities.
 Canadian bond prices were flat to lower, following the U.S.
Treasury prices, which were steady ahead of an auction of
10-year notes later in the session. [ID:nL9719366]
 ($1=$1.08 Canadian)
 (Reporting by Jennifer Kwan; Editing by Jeffrey Hodgson)