The Canadian dollar has posted losses in the Thursday session. Currently, USD/CAD is trading at 1.2700, down 0.22% on the day. On the release front, Canada releases the New Housing Price Index, while the US will publish unemployment claims.
Canadian housing numbers jumped on Wednesday, helping the Canadian dollar hold its own against the greenback. Housing Starts improved to 223 thousand, well above the forecast of 211 thousand. This matched the highest reading since March. There was more good news from Building Permits, which soared 3.8%, crushing the estimate of 0.7%. This follows two sharp declines.
On Tuesday, Bank of Governor Stephen Poloz on Tuesday, after Poloz maintained a neutral stance towards interest rates. Poloz said that the Bank continued to monitor how the economy was doing after rate hikes in July and September. The markets were caught off guard by the September move, and the Canadian dollar responded with strong gains. Poloz did not offer any insight as to future rate hikes, leaving the markets guessing regarding a December rate hike. Poloz added that he was not concerned that inflation remains below the BoC’s target of 2 percent. The BoC will have to keep a close eye on the US, as the Federal Reserve is almost certain to raise rates in December. If the BoC does not match the hike, the Canadian dollar will likely weaken against the greenback.
