BUSINESS

Canadian dollar rises amid positive housing starts data, rising commodities

04/09/2013 08:46 EDT | Updated 06/09/2013 05:12 EDT
TORONTO - The Canadian dollar advanced Tuesday as housing starts in March came in better than expected while commodity prices got a lift from tame Chinese inflation data.

The loonie was up 0.1 of a cent at 98.4 cents US as Canada Mortgage and Housing Corp. reported that housing starts in Canada were at an annualized rate of 184,028 units last month, up slightly from 183,207 in February. That was well above the 175,000 economists had forecast.

But economists sounded a note of caution.

"While the 184,000 pace marks an improvement from the winter lull, it is still well below the pace seen late last year and continues to point to an overall deceleration in homebuilding," said CIBC economist Emanuella Enenajor.

"Indeed, on an annual basis, starts are down 13.6 per cent from year-ago levels."

Government data Tuesday showed China's consumer prices rose at a 2.1 per cent rate in March, down from the previous month’s 3.2 per cent and well below the official target of 3.5 per cent for the year. Wholesale prices in the world’s second-largest economy declined by 1.9 per cent compared with last year.

The showing gives China some leeway in being able to take further measures to stimulate growth, particularly if industrial production figures due out next week show activity weaker than expected.

China is the world's biggest consumer of copper and the metal was up seven cents at US$3.44 a pound.

June gold bullion gained $14.20 to US$1,586.70 an ounce.

Oil prices shed early declines and the June contract on the New York Mercantile Exchange closed up 84 cents at US$94.20 a barrel.