Loonie lower amid data showing weakening housing sector, higher commodities
The Canadian dollar was down about two-thirds of a US cent Wednesday as the Bank of Canada said it was keeping its key rate unchanged at one per cent amid expectations of weaker than expected economic growth. (Jonathan Hayward / THE CANADIAN PRESS)
Malcolm Morrison, The Canadian Press
Published Wednesday, January 9, 2013 9:08AM EST
Last Updated Wednesday, January 9, 2013 12:17PM EST
TORONTO -- The Canadian dollar declined Wednesday amid data showing slightly fewer housing starts last month and lower oil prices on global markets.
The loonie was down 0.04 of a cent to 101.31 cents US as Canada Mortgage and Housing Corp. reported that December starts came in at a seasonally adjusted annual rate of 197,976. That was down slightly from 201,376 in November but still higher than the 195,000 that economists had expected.
CMHC said the decline was due to fewer starts in rural areas of the country while Canadian urban starts remained stable.
"Today's data suggest that the homebuilding sector, once an engine of growth for the Canadian economy, is on a clear softening trend," said CIBC World Markets economist Emanuella Enenajor.
Commodity prices were mixed.
Oil shed early gains after the U.S. Energy Information Administration reported a 1.3 million-barrel climb in crude supplies for last week, which was actually below the 1.5 million barrel gain that economists expected. But gasoline inventories jumped 7.4 million barrels, much higher than the 2.6 million that had been forecast.
February crude drifted 20 cents lower to US$93.46 a barrel.
March copper on the New York Mercantile Exchange gained two cents to US$3.69 a pound.
February bullion lost $3.50 to US$1,658.70 an ounce.
Bullion and gold stocks have suffered in recent days because of uncertainty about whether the U.S. Federal Reserve might end its stimulus program of bond buying in the second half of 2013. Minutes from the Fed's latest policy meeting showed a split over how long to continue the purchases amid concerns that they could destabilize the economy.
The bond buying, known as quantitative easing, has supported bullion prices because of worries the program would drive inflation higher.