Forex - USD/CAD hits 4-month highs, Canadian housing starts disappoint

Shutterstock photo
Shutterstock photo

Shutterstock photo - - The U.S. dollar rose to four-month highs against its Canadian counterpart on Tuesday, after disappointing housing starts data from Canada and as expectations for a sooner-than-expected U.S. rate hike continued to support the greenback.

USD/CAD hit 1.1020 during European afternoon trade, the pair's highest since April 29; the pair subsequently consolidated at 1.1019, gaining 0.41%.

The pair was likely to find support at 1.0937, the low of August 26 and resistance at 1.1047, the high of April 25.

In a report, the Canada Mortgage and Housing Corporation said that the annual rate of housing starts fell to 192,400 units last month from July's total of 199,800 units. Analysts had expected Canadian housing starts to decline to 195,000 units in August.

The data came a day after another report showed that Canada's building permits climbed 11.8% in July, compared to expectations for a 4.2% decline, after a revised 16.4% increase in June.

Meanwhile, the greenback strengthened further as a study by the San Francisco Federal Reserve published on Monday indicated that Fed officials see rates rising earlier than markets expect.

The greenback has strengthened in recent weeks amid expectations that the Fed may announce a rate increase earlier than expected after economic data indicated that the recovery in the U.S. is progressing strongly.

The loonie was lower against the euro, with EUR/CAD rising 0.36% to 1.4199.

The single currency remained under pressure after the European Central Bank cut rates to record lows across the euro zone late last week and announced fresh stimulus measures in an attempt to shore up slowing growth and inflation in the region.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics