TORONTO: The Canadian dollar edged higher against its US counterpart on Tuesday as oil rose and stronger-than-expected domestic housing starts suggested the country's long housing boom may not yet be over.
Housing starts rose to a seasonally adjusted annual rate of 207,041 units in December from an upwardly revised 187,273 units in November, the Canada Mortgage and Housing Corp said. Economists polled by Reuters had expected starts to rise to a 195,000 unit pace.
Prices of oil, one of Canada's major exports, rose after a sharp sell-off but analysts said the market looked vulnerable to further falls.
US crude prices were up 0.44 percent at $52.19 a barrel.
The US dollar steadied against a basket of major currencies amid investor doubts that US President-elect Donald Trump's first news conference on Wednesday will take an aggressive line on issues such as trade policy and relations with China.
At 9:17 a.m. ET (1417 GMT), the Canadian dollar was trading at C$1.3216 to the greenback, or 75.67 US cents, slightly stronger than Monday's close of C$1.3230, or 75.59 US cents.
The currency's weakest level of the session was C$1.3257, while its strongest was C$1.3199.
On Friday, the loonie reached its strongest point in more than three weeks at C$1.3177 following surprisingly strong domestic employment and trade data.
Still, foreign exchange strategists expect the loonie to weaken over the coming year, pressured by trade agreement uncertainty and probable monetary policy divergence between the Federal Reserve and the Bank of Canada.
The value of Canadian building permits edged 0.1 percent lower in November due to lower construction intentions in Alberta following a surge the month before ahead of provincial building code changes, data from Statistics Canada showed.
Canadian government bond prices were lower across the yield curve, with the two-year price down 2.5 Canadian cents to yield 0.763 percent and the benchmark 10-year falling 9 Canadian cents to yield 1.691 percent.
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