Canadian forex review: C$ closes lower for fourth straight day

By Commodity News Service Canada

WINNIPEG, Jan. 9 – The Canadian dollar closed lower for the fourth straight day on Thursday, making the week’s total losses almost two full cents against the US dollar.

Disappointing Canadian housing data was to blame for Thursday’s decline in the value of the loonie. Statistics Canada reported that building permits were 6.7 per cent lower at C$6.8 billion in November from October, which compares with expectations of a 2.7 per cent decline. Much of the decrease was linked to a drop in construction intentions, especially in the residential sector, said StatsCan.

Canadian housing starts were also disappointing, as they fell by 4.1% in December, which marked a 4-month low and fell below expectations, brokers said.

The Canadian currency closed at US$0.9215 or US$1=C$1.0852 on Thursday, which compares with Wednesday’s North American settlement of US$0.9256 or US$=C$1.0804.

Traders were looking ahead to Friday’s employment data from Canada and the US, which could have an impact on the Canadian dollar if the numbers come in different than expectations.

Canadian bonds moved higher, following the US Treasury market ahead of the release of Friday’s key employment data from both sides of the border, analysts said.

The two-year bond yielded 1.100% late Thursday, from 1.113% late Wednesday. The 10-year bond yielded 2.689%, from 2.720%. Bond yields fall as their prices rise.