Canadian dollar up amid strong housing sector data; traders look to jobs report

Photo: The Canadian Press. All rights reserved.

Loonies are pictured in Vancouver, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward

TORONTO - The Canadian dollar closed higher Thursday amid a strong housing sector report while traders looked ahead to key employment data coming out Friday.

The loonie rose 0.38 of a cent to 90.98 cents US as Statistics Canada reported that the total value of building permits issued by municipalities rose 8.5 per cent to $7 billion in January. That was much higher than the 1.7 per cent rise that economists expected and followed a 4.8 per cent decrease in December.

The agency said the increase in January came from higher construction intentions in the residential sector, which more than offset a decline in the non-residential sector.

Economists looked for the Canadian economy to have created about 15,000 jobs in February.

Markets will also look to American job creation figures from last month on Friday.

Harsh winter conditions have crimped job creation and expectations for the February U.S. non-farm payrolls report are muted. Economists looked for around 145,000 new positions to have been created last month after only 113,000 jobs were created in January.

There was positive news out ahead of that data. Weekly applications for U.S. unemployment benefits, a proxy for layoffs, declined to 323,000 last week from 348,000, the lowest level in three months.

Markets are still monitoring developments in Ukraine after getting off to a rocky start at the beginning of the week after Russia invaded the country’s Crimean peninsula. Russia has major military installations in Crimea and many people are Russian speaking.

European leaders said Thursday that Russia will face sanctions unless it withdraws its troops from Crimea or engages in credible talks to defuse the situation.

But leaders appeared divided between countries close to Russia’s borders and some western economic powerhouses — notably Germany — that were taking a more dovish line.

On the commodity markets, April crude was up 11 cents to US$101.56 a barrel.

May copper was ahead two cents at US$3.22 a pound while April gold bullion gained $11.50 to US$1,351.80 an ounce.

Overseas, China’s finance minister said Thursday that creating jobs is the government’s priority this year and economic growth below the official target of 7.5 per cent might be acceptable. China’s economic growth tumbled to a two-decade low of 7.7 per cent last year.