USD/CAD Rallies Higher Despite Positive Canadian Housing Starts Data

The Canadian dollar today weakened against the US dollar despite the release of positive Canadian housing starts data by the Canada Mortgage and Housing Corporation. The loonie tried to rally against the greenback after the release, but the greenback rallied higher after the release of the US JOLTS job openings report.

The USD/CAD currency pair gained over 40 points at the height of its rally as the pair recovered from 10-month lows set during Friday’s session.

The Canadian dollar has been extremely strong against the US dollar in recent weeks following hawkish comments from Bank of Canada Governor Stephen Poloz. Positive macro data from the Canadian docket had heightened market expectations of a rate hike in the near future. However, it seems that the markets have already priced-in the positive Canadian macro data given that the housing starts data had minimal impact on the pair. The housing starts came in at 212,700 versus the expected 200,000.

Despite opening the American session weakly, the US dollar recovered and rallied higher as evidenced by the US Dollar Index, which was trading above its opening price of 96.07 at the tine of writing. The release of the disappointing US JOLTS job openings data by the Bureau of Labor Statistics, which came in at 5.666 million versus the expected 5.950 million, was discounted by the markets.

Tomorrow’s BoC monetary policy decision and Fed chair Janet Yellen‘s testimony before congress are most likely on influence the currency pair’s future performance.

The USD/CAD was trading at 1.2929 as at 15:37 GMT having risen from a daily low of 1.2881. The CAD/JPY was trading at 88.29 having dropped from a high of 88.83.

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