USD/CAD Recovers Lost Ground on Canadian Housing Price Index

The USD/CAD currency pair today recovered initially lost ground after the release of Canada’s housing price index data in the early American session. The pair had lost significant ground earlier in today’s session due to yield spread differentials that were much stronger than the impact of global oil prices on the loonie.

The USD/CAD currency pair recovered over 40 points from its daily lows hit earlier in today’s session after the release of the Canadian housing data.

The Canadian dollar was stronger against the US dollar during the European session boosted by higher global crude oil prices, as tracked by the West Texas Intermediate, which hit highs around $57/bbl. Other factors propping up the loonie included yesterday’s building permits data and the strong yield spread differentials experienced earlier in today’s session. However, the hawkish stance taken by Bank of Canada Governor, Stephen Poloz, in recent comments also boosted the loonie against the greenback.

The release of the Canadian new housing price index by Statistics Canada, which met expectations, was largely unnoticed as the greenback rebounded in the early American session. This was despite the higher than expected initial jobless claims data released by the Department of Labor, which came in at 239,000 versus the expected 232,000, but could not derail the greenback.

The currency pair’s short-term performance is likely to be affected by global oil prices as well as the planned unveiling of the US tax reform bill, scheduled for later today.

The USD/CAD currency pair was trading at 1.2718 as at 14:54 GMT having rallied from a daily low of 1.2685. The CAD/JPY currency pair was trading at 89.17 having dropped from a high of 89.62 earlier today.

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