TORONTO: The Canadian dollar was marginally stronger than its US counterpart on Monday after data showed Canadian housing starts came in ahead of expectations in May, but market moves were muted ahead of what looked like a quiet week.
A report from Canada Mortgage and Housing Corp showed seasonally adjusted annualized housing starts rose to 198,324 last month, while April was revised higher to 196,687 units. Analysts had forecast 185,000 for May.
The stronger data suggested housing will contribute to economic growth in the second quarter after an unusually frigid winter put a chill on construction.
"(The Canadian dollar was) a little bit better ... Housing starts helped a little bit," said Benjamin Reitzes, senior economist and foreign exchange strategist at BMO capital Markets. "This is going to be a quiet week overall for every market, currency markets as well, after pretty solid action last week."
At 9:38 a.m. EDT (1339 GMT), the Canadian dollar was outperforming most of its counterparts. It was at C$1.0917 to the greenback, or 91.60 US cents, up from Friday's close of C$1.0930, or 91.49 US cents.
Reitzes noted that if yields, particularly US Treasury yields, continue to rise, it could weigh on the Canadian dollar as higher US yields attract flow to the greenback.
Canadian government bond prices were lower across the maturity curve, with the two-year down 1 Canadian cent to yield 1.067 percent, and the benchmark 10-year off 9 Canadian cents to yield 2.332 percent.
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