News Column

Canadian dollar little changed amid strong U.S. housing data, mixed commodities

May 16, 2014

Malcolm Morrison, The Canadian Press

TORONTO - The Canadian dollar was little changed Friday amid a strong reading on U.S. housing starts and mixed commodity prices.

The loonie was off 0.01 of a cent to 91.93 cents US as housing starts for April came in at an annualized pace of 1.072 units, higher than the 980,000 that economists had expected.

Financial markets have been pressured this week by fresh economic worries after data showed the recovery in Europe is more fragile than thought, while retail giant and economic barometer Wal-Mart Stores delivered a disappointing outlook for the second quarter.

Traders will be particularly interested in the University of Michigan's consumer sentiment index in light of the Wal-Mart report. Economists expect the index rose to 85 in mid-May, which would be the highest reading since July, from 84.1 in April.

This has also been a remarkable week in the fixed income area where bond yields have fallen sharply amid equity market nervousness.

The benchmark U.S. 10-year Treasury was at 2.49 per cent Friday morning, after starting the week at 2.66 per cent and as low as 2.47 per cent on Thursday.

And the rally hasn't been confined to the U.S.

In Canada, intraday yields on 10-year Government of Canada bonds touched 2.22 per cent Thursday after sitting as high as 2.4 per cent earlier in the week.

On the commodity markets, June crude gained 33 cents to US$101.83 a barrel.

July copper was up a cent at US$3.16 a pound while June bullion faded $4.30 to US$1,289.30 an ounce.

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Source: Canadian Press DataFile

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