US dollar advanced to its highest point today against the Canadian rival, after a report said that Canadian building permits declined at a much faster pace than projected in August, while at the same time the US budget crisis still pressured the greenback.
USD/CAD rose to a session high at 1.0334 at 12:30 GMT, after which consolidation followed at 1.0322, rising 0.26% on a daily basis. Support for the pair was expected at September 30th low, 1.0274, while resistance was to be met at October 2nd high, 1.0355.
Statistics Canada said earlier on Monday that the total value of building permits in Canada recorded a considerable drop in the month of August, falling at an almost three times faster pace than expected, as this was also the fastest drop rate since April 2011. A major factor behind this result was the strong decrease in the number of permits for non-residential construction, the largest decrease rate since 1989. The total value of the issued building permits in the country fell 21.2% to reach 6.34 billion CAD in August. The total value of permits for non-residential projects declined 37.9% during the same month, the most since September 1989. The value of permits for residential construction fell 5.4%. Julys result has been revised up to a 21.4% increase from a 20.7% gain previously.
Meanwhile, the budget deadlock in the United States continued to persist. On Sunday Republican House Speaker John Boehner said that the House will not support bills in favor of a complete re-activation of the government or raise the US debt limit unless agreement on spending cuts with the Democrats was reached. “The fact that the U.S. government is still shut down is starting to concern markets a little bit more now that we’re a week into it,” David Bradley, director of foreign-exchange trading at Scotia Capital Inc., said by phone from Toronto, cited by Bloomberg. “We just had Canadian data, which was quite a bit weaker than expected. That’s helped this last little push.”
The Canadian currency was losing ground against most of its 16 major peers today, after the price of crude oil, country’s largest export, decreased. At 14:24 GMT, crude oil futures traded at 102.30, down by 1.48% on a daily basis.
In addition, Canadian government bonds rose, causing yields on the benchmark 10-year note to erase 0.03%, reaching 2.55%.
Elsewhere, the loonie, as Canadian dollar is also known, was lower against the euro, with EUR/CAD cross rising 0.14% to trade at 1.3972 at 14:40 GMT. GBP/CAD pair was gaining 0.42% for the day to trade at 1.6562 at 14:42 GMT.
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