The Canadian dollar closed higher Monday amid a weak housing report and strong Chinese export data.
The loonie ended up 0.19 of a cent at 94.03 cents (U.S.) as Canada Mortgage and Housing Corp. said housing starts came in at an annualized rate of 192,235 units in November, a decrease from 198,161 in October. It was also less than the 195,000 reading that economists had expected.
Meanwhile, China posted its biggest trade surplus in almost five years, rising to $33.8-billion from $31.1-billion the month before. Exports ran ahead 12.7 per cent from November last year, well ahead of October’s 5.6 per cent growth.
Imports grew only by 5.3 per cent year over year amid tepid domestic demand.
Elsewhere in Asia, Japan slashed its estimate of economic growth for the July-September quarter. The world’s third-largest economy grew at an annualized 1.1 per cent rate last quarter, less than half the pace of the previous quarter amid weaker-than-expected corporate investment. The initial estimate had put growth at 1.9 per cent.
It is a light week for North American economic data after last week’s flood that included strong U.S. manufacturing and housing reports, better-than-expected third-quarter economic growth and improving consumer confidence. The week was capped off by data showing stronger-than-expected job growth last month in both Canada and the U.S.
While the figures are a welcome sign that the American economic revival remains on track, it also raised concerns that the Federal Reserve is set to start winding up its asset-buying program sooner than thought, perhaps as early as next week when Fed members meet.
In the U.S., traders will look at the retail sales report for November on Thursday for further reinforcement on whether the Federal Reserve thinks the economy is strong enough to start cutting back on its $85-billion of monthly bond purchases.
Economists are looking for sales to have risen by 0.6 per cent during the month.
On the commodity markets, oil prices were lower following a string of gains last week amid data showing bigger-than-expected drawdowns in U.S. inventories. The January crude contract on the New York Mercantile Exchange edged 31 cents lower to $97.34 a barrel.
March copper was 1 cent higher to at 3.25 a pound while February gold in New York added $5.20 to $1,234.20 an ounce.Report Typo/Error