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Loonie Struggles on Latest Permits Data Release

February 7, 2013 at 14:52 by Miranda Marquit

All the Canadian dollar bills denominationsCanadian dollar is struggling today, engaging in rangebound trading against other majors in spite of the general volatility being seen elsewhere in the currency market. The latest building permits numbers are weighing on the loonie, indicating that the economy might be struggling.

Loonie is trapped in narrow trading today, particularly against the US dollar. The latest difficulty for the Canadian dollar is that building permits issued in December fell. The value of building permits fell by 11.2 per cent — a sharp contrast to the expectations for a gain of 5 per cent. So, even though home prices rose by 0.2 per cent in December, there are plenty of signs of a slowing Canadian economy to outweigh the good.

Even so, the US dollar still isn’t showing huge gains over the Canadian dollar. Even with a favorable jobless claims report, the greenback still shows some weakness against the loonie. There’s just too little difference between the two right now. Canadian dollar might derive some support from higher oil prices later on, but overall the currency is most likely to remain rangebound for the short term.

At 14:49 GMT USD/CAD is steady at 0.9957, remaining at the opening level. EUR/CAD is down to 1.3394 from the open at 1.3464. GBP/CAD is up to 1.5652 from the open at 1.5594.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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