The Canadian dollar was the main beneficiary of the better housing starts number. A sustained rebound in US home construction would bring a much-needed boost to Canadian lumber exports.
USD/CAD fell a quarter-cent to 0.9820 after the data. Yesterday’s high was unable to take out the October high of 0.9884, signaling continued consolidation down to 0.9725/50.
The main risk in the day ahead is Chinese GDP. I see upside risks to the 7.4% consensus after the strong export numbers on the weekend and that is likely to weigh on USD/CAD.
PS. It’s a good thing Canadians don’t care much for soccer because yesterday’s 8-1 loss against Honduras would be enough to send some countries into a depression.