The Canadian dollar fell against its US counterpart, but advanced versus most other actively traded currencies, as the economic recovery in North America increased the attractiveness of the currency for the investors.
The report of Canada Mortgage and Housing Corporation this week said that the seasonally adjusted annual rate of housing starts was 170,400 units in January. This is up from 169,000 units in December. Today’s report of Statistics Canada showed that the New Housing Price Index rose 0.1 percent in December, following the 0.3 percent advance in November. The good reports from the US, the main trading partner of Canada, reinforced the favorable outlook about Canada’s economy and currency.
The dependency of the loonie’s performance (the nickname of the Canadian currency) on the US economy caused the interesting effect: the Canadian currency moves together with the US dollar, not inversely as usual. Jack Spitz, the managing director of foreign exchange at National Bank of Canada, said about such behavior of the loonie:
Canada is trading very much in tandem with the dollar. Over the past several weeks, the Canadian dollar itself is trading more as a North American currency.
USD/CAD rose from 0.9937 to 0.9957 today as of 23:59 GMT after it reached previously its intraday high of 0.9987. Meanwhile, EUR/CAD dropped from 1.3644 to 1.3542. CAD/JPY advanced from 82.83 to 83.68.
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