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Canadian dollar edges higher as oil prices hold steady

01/10/2017

The Canadian dollar edged higher against its U.S. counterpart on Tuesday, helped by steadier prices for oil, a major Canadian export and an increase in domestic housing starts.

USD/CAD slid 0.14% to 1.3199 from Monday’s close of 1.3214.

The pair’s strongest level of the session was 1.3256, while its weakest was 1.3198.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.2% at 101.71.

The greenback edged lower amid investor caution ahead of a first press conference by U.S. President-elect Donald Trump on Wednesday.

The loonie, as Canada's currency is also known, found support as oil prices pushed higher after a sharp selloff triggered by doubts over whether an agreement between major producers to cut output in a bid to reduce a global supply glut will be effective.

Higher prices for oil, one of Canada's major exports, typically boost the Canadian dollar.

The Canadian dollar received an additional boost after the Canada Mortgage and Housing Corp said housing starts rose to a seasonally adjusted annual rate of 207,041 units in December from an upwardly revised 187,273 units in November.

A separate report showed that the number of Canadian building permits issued edged lower in November.

Statistics Canada reported that building permits dipped 0.1%, compared to economists’ forecasts for a decline of 0.5%.

Octobers figure was revised up to show a gain of 10.5% from the previously reported 8.7%.

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