Loonie Extremely Weak on Negative Housing Data & Oil Prices

The Canadian dollar was among the weakest currencies today, dragged down by negative domestic housing data. Both housing starts and building permits fell unexpectedly. The falling prices for crude oil, Canada’s biggest export, were weighing on the currency as well.
According to a report from Canada Mortgage and Housing Corporation, housing starts dropped to a monthly seasonally adjusted annual rate of 197,329 units in December, down by 3% from 204,320 units in November. That is instead of an increase to approximately 212,000 units predicted by experts. Statistics Canada reported that building permits dropped by 2.4% in November after falling by 1.5% in the previous month. Ahead of the report, analysts had promised an increase of 1.0%.
Prices for crude oil fell during Thursday’s trading session, though losses were not particularly big. The main reason for the drop was the decreasing risk premium on markets. While usually, crude oil reacts negatively to a worsening geopolitical situation, the recent escalation of tensions between the United States and Iran boosted the commodity due to concerns about potential supply disruptions. But it looks like both sides want to avoid a direct military confrontation and have ceased hostilities for the time being. And that reduced incentive for traders to amass futures for crude.
Going forward, the loonie will react to Canadian employment data as well as US nonfarm payrolls, both of which will be released on Friday.
USD/CAD climbed from 1.3038 to 1.3076 as of 19:43 GMT today, touching the high of 1.3104 intraday. EUR/CAD jumped from 1.4479 to 1.4525. At the same time, CAD/JPY was up a little from 83.66 to 83.72.

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Original from: www.earnforex.com