Loonie steadies near 9-month high as home sales dip

TORONTO: The Canadian dollar was little changed against its US counterpart on Monday, holding near Friday's nine-month high, as domestic data showed that housing sales dipped for the first time in four months.

Resales of Canadian homes fell 0.2% in June from the previous month, the Canadian Real Estate Association said on

Monday in the first decline reported since home sales plunged in February. The industry group said actual sales, not seasonally adjusted, rose 0.3% from a year earlier.

Tightening of mortgage rules and interest rate hikes by the Bank of Canada had weighed on Canada's once red-hot housing market. But Canadian borrowers have benefited in recent months from a slide in global bond yields.

Last week, the Bank of Canada said the housing market is stabilizing, as it left its benchmark interest rate steady at 1.75% and made clear it had no intention of easing monetary policy.

The central bank's stance has contrasted with dovish guidance last week from the US Federal Reserve. Canada's inflation report for June is due on Wednesday, which could offer further clues on the outlook for Canadian interest rates.

At 10:11 a.m. (1411 GMT), the Canadian dollar was trading nearly unchanged at 1.3033 to the greenback, or 76.73 US cents. The currency, which on Friday touched its strongest intraday level since Oct. 25 at 1.3018, traded in a range of 1.3022 to 1.3042.

Speculators have raised bullish bets on the currency, data from the US Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of July 9, net long positions rose to 9,226 contracts from 6,293 contracts in the prior week.

The price of oil, one of Canada's major exports, rose on Monday as Chinese industrial output and retail data topped expectations, but gains were capped by overall figures showing the country's slowest quarterly economic growth in decades. US crude oil futures were up 0.3% at $60.37 a barrel.

Canadian government bond prices were higher across the yield curve, with the two-year up 2.5 Canadian cents to yield 1.568% and the 10-year rising 20 Canadian cents to yield 1.588%.

On Friday, the 10-year yield touched a seven-week high at 1.649%.