Loonie adds to losses amid strong housing report, weak commodity prices
TORONTO - The Canadian dollar closed lower Monday amid a stronger than expected reading on housing starts and commodity prices that fell in the wake of disappointing data from China.
The loonie was off 0.09 of a cent to 90.08 cents US after a lacklustre employment report on Friday helped push the currency down eight-tenths of a cent US.
Canada Mortgage and Housing Corp. reported that housing starts for February came in at a seasonally adjusted annual rate of 192,094, slightly higher than the consensus expectation of 190,000. The showing followed a gain of 180,481 starts racked up in January.
"Housing looks likely to be a modest growth contributor in upcoming quarters, helped by the completion of multiple-unit dwellings started a year earlier," said Avery Shenfeld, chief economist at CIBC World Markets.
Commodity prices fell sharply in the wake of weak Chinese trade data and disappointing Japanese growth for the fourth quarter.
Data released on the weekend showed Chinaâ€™s exports fell by an unexpectedly large 18 per cent in February.
Chinaâ€™s official 2014 economic growth target of 7.5 per cent assumes trade also will grow by 7.5 per cent. But customs data showed that combined imports and exports so far this year have shrunk by 4.8 per cent.
Meanwhile, Japan reported Monday a record current account deficit for January, and lowered its economic growth estimate for the October-December quarter to 0.7 per cent from one per cent.
Copper prices fell for a second session in the wake of the Chinese data, with the May contract in New York losing another five cents to US$3.03 a pound. Prices for the metal tumbled 14 cents Friday after Chinese authorities allowed the countryâ€™s first corporate bond default, which fuelled speculation as to how many more companies may be in a similar situation.
The weak overseas data pushed the April crude contract on the New York Mercantile Exchange down $1.46 to US$101.12 a barrel.
Bullion prices erased early losses and the April contract gained $3.30 to US$1,341.50.
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