C$ rallies as oil climbs, housing starts rebound

TORONTO: The Canadian dollar strengthened against its US counterpart on Monday, recovering from a one-week low in the prior session as oil prices climbed to their highest this year and domestic data showed a 15.8% jump in March housing starts.

Gains for the loonie came as the US dollar lost ground against a basket of major currencies. Investors squared positions before a European Central Bank meeting this week, boosting the euro.

The price of oil, one of Canada's major exports, was supported by OPEC supply cuts, US sanctions against Iran and Venezuela and fighting in Libya as well as strong US jobs data. US crude oil futures rose 1.2% to $63.84 a barrel.

Canadian housing starts climbed in March to a seasonally adjusted annualized rate of 192,527 units after slowing to a revised 166,290 units in February.

At 9:56 a.m. (1356 GMT), the Canadian dollar was trading 0.4% higher at 1.3340 to the greenback, or 74.96 US cents. The currency, which touched on Friday its weakest since March 29 at 1.3403, traded in a range of 1.3340 to 1.3386.

Data on Friday from the US Commodity Futures Trading Commission and Reuters calculations showed that speculators have raised their bearish bets on the Canadian dollar. As of April 2, net short positions had increased to 44,323 contracts from 39,571 in the prior week.

More than six months after the United States, Mexico and Canada agreed a new deal to govern more than $1 trillion in regional trade, the chances of the countries ratifying the pact this year are receding.

Canadian government bond prices were lower across the yield curve, with the 10-year falling 8 Canadian cents to yield 1.709%.