The Canadian dollar was at a 13-month high Tuesday morning amid expectations that the U.S. Federal Reserve will launch another round of stimulus to help the American economy.

The loonie rose 0.53 of a cent to 102.83 cents US as traders also took in a strong housing report.

Canada Mortgage and Housing Corp. said housing starts came in at an annual rate of 224,900 during August. The showing was a pleasant surprise as economists had expected a decline to 200,000.

"Clearly low interest rates continue to support home construction activity, although signs of deceleration in the secondary market could dampen that momentum," said CIBC World Markets economist Emanuella Enenajor.

"Today's data suggest residential construction in the third quarter may not be as measurable a drag to activity as previously thought."