The Canadian dollar was little changed against its U.S. counterpart on Monday, consolidating some recent gains as Wall Street edged lower and domestic data showed activity easing in Canada’s red-hot housing market in April.
The loonie was trading nearly unchanged at 1.2100 to the greenback, or 82.64 U.S. cents. Last Wednesday, it touched a six-year high at 1.2042.
Canadian home sales fell 12.5% in April from March, with the average selling price also declining slightly on the month, data from the Canadian Real Estate Association showed.
Separate data from the Canadian Mortgage and Housing Corporation showed housing starts falling 19.8%.
U.S. stocks slipped as investors shifted their focus to retail earnings this week for clues on the strength of consumer spending.
Canada sends about 75% of its exports to the U.S. including oil and lumber. As U.S. Trade Representative Katherine Tai prepared to meet her Canadian and Mexican counterparts on Monday to review progress in the new North American trade agreement, she was under pressure from home builders and lawmakers to cut U.S. tariffs on Canadian lumber.
U.S. crude prices were up 0.20% at $65.5 a barrel as European economic reopenings offset gloom from surging COVID-19 cases in Asia and underwhelming Chinese manufacturing data.
Canada’s inflation report for April is due on Wednesday which could offer clues on the Bank of Canada policy outlook.
If the Canadian dollar continues to rise, it could create headwinds for exports and business investment as well as affecting monetary policy, BoC Governor Tiff Macklem said last Thursday.
Speculators have raised their bullish bets on the Canadian dollar to the highest since November 2019, data from the U.S. Commodity Futures Trading Commission showed on Friday.
Canadian government bond yields were higher across a steeper curve. The 10-year rose 1.5 basis points to 1.578%.
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