Loonie closes slightly higher despite slowing housing starts

The Canadian dollar closed slightly higher Monday amid a weaker-than-expected reading on housing starts and rising commodity prices.

The loonie gained 0.09 of a cent to end at 79.39 cents (U.S.) after Canada Mortgage and Housing Corp. said housing starts during February came in at an annualized rate of 156,276 units, down from 187,025 in January.

Economists had expected a reading of around 179,000, but analysts pointed out that severe winter weather during the month likely played a role.

In addition, February isn't generally an important time for home building, which is a further reason to play down this particular month's figures, said CIBC World Markets chief economist Avery Shenfeld.

"Still, we see real residential construction as a slight negative in terms of its contribution to real GDP growth in upcoming quarters," Shenfeld said.

Traders also looked ahead to the release of February employment data on Friday. Statistics Canada is expected to report that about 5,000 jobs were lost during the month following a gain of 35,400 jobs in January.

On the commodity markets, a weaker U.S. dollar helped April crude in New York was 39 cents higher to $50 a barrel.

April bullion gained $2.20 to $1,166.50 an ounce while May copper rose 6 cents to $2.67 a pound.