Canada dollar turns lower on building permits data

Thu Jan 10, 2008 9:31am EST
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By Frank Pingue

TORONTO (Reuters) - The Canadian dollar skidded to a three-week low versus the U.S. dollar on Thursday morning as domestic building permits data came in well below estimates.

Domestic bond prices bounced back from losses suffered in the previous session, getting a boost from the building permits data while dealers positioned themselves ahead of the more key Canadian jobs report due on Friday.

At 9:15 a.m. EST the Canadian dollar was at 98.58 U.S. cents, valuing a U.S. dollar at C$1.0144, down from 99.03 U.S. cents, or C$1.0098, at Wednesday's close.

The latest fall in the Canadian dollar was triggered by the weak building permits data and a lower-than-expected reading on U.S. weekly jobless claims that helped support the greenback.

Together, the economic data yanked the Canadian dollar from an overnight session high of 99.50 U.S. cents, or C$1.0050.

"The market was encouraged by the claims data out of the U.S. that showed a bigger than expected drop and that has kind of tempered a bit of disappointment following last Friday's (U.S) December payrolls number," said Paul Ferley, assistant chief economist at Royal Bank of Canada.

"So the markets is taking some hope from that and you are seeing a bit of strength in the U.S. dollar playing out against the Canada (dollar), and then the trend is being abetted by disappointing permits data."

The value of Canadian building permits fell 9.9 percent in November, which was much steeper than the 2.0 percent decline that had been expected by analysts.   Continued...