Canadian dollar gains on improving domestic outlook

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Canadian dollar gains on improving domestic outlook
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Loonie at 75.90 U.S. cents

edged higher against its U.S. counterpart on Tuesday, moving closer to a recent 10-month high, as investors cheered domestic inflation and housing data.

“Over the last couple of weeks, the upward trajectory of the CAD was merely a reflection of the souring of sentiment toward the USD rather than an improving domestic economic outlook,” said Tony Valente, senior FX dealer at AscendantFX. Canada’s annual inflation rate dropped to 2.8 per cent in June, a 27-month low and below the 3 per cent rate expected by economists. Separate data showed Canadian housing starts rose 41 per cent in June compared with the previous month, the largest increase in the last 10 years.

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