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Canadian dollar edges lower amid weaker than expected housing report

Canadian dollars are pictured in Vancouver, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward
December 09, 2013 - 5:32 AM

TORONTO - The Canadian dollar was slightly lower Monday amid a weak housing report and strong Chinese export data.

The loonie was down 0.09 of a cent to 93.77 cents US as Canada Mortgage and Housing Corp. said that housing starts came in at an annualized rate of 192,235 units in November, a decrease from 198,161 in October. It was also less than the 195,000 reading that economists had expected.

Meanwhile, there was little reaction to data that showed China has posted its biggest trade surplus in almost five years, rising to US$33.8 billion from $31.1 billion the month before. Exports ran ahead 12.7 per cent from November last year, well ahead of October's 5.6 per cent growth.

Imports grew only by 5.3 per cent year-over-year amid tepid domestic demand.

Meanwhile, Japan slashed its estimate of economic growth for the July-September quarter. The world’s third-largest economy grew an annualized 1.1 per cent last quarter, less than half the pace of the previous quarter amid weaker than expected corporate investment. The initial estimate had put growth at 1.9 per cent.

It is a very light week for North American economic data after last week's flood that included strong U.S. manufacturing and housing reports, better than expected third-quarter economic growth and improving consumer confidence. The week was capped off by data showing stronger than expected job growth last month in both Canada and the U.S.

While the figures are a welcome sign that the American economic revival remains on track, it also raised concerns that the Federal Reserve is set to start winding up its asset buying program sooner than thought, perhaps as early as next week when Fed members meet.

In the U.S., traders will look at the retail sales report for November on Thursday for further reinforcement on whether the Federal Reserve thinks the economy is strong enough to start cutting back on its US$85 billion of monthly bond purchases.

Economists are looking for sales to have risen by 0.6 per cent during the month.

In commodities, oil prices were flat after a string of gains last week amid data showing bigger than expected drawdowns in U.S. inventories. The January crude contract on the New York Mercantile Exchange edged one cent lower to US$97.64 a barrel.

March copper was unchanged at US$3.25 a pound while February gold in New York added $1.80 to US$1,230.80 an ounce.

News from © The Canadian Press, 2013
The Canadian Press

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