USD/CAD Analysis – Canada Housing Suffers from High BOC Rates
[[USD/CAD]] broke above the 200 daily SMA yesterday, which acted as support twice in January. The price remains at the highs for this year but it is facing the 100-day moving average now and today’s economic reports from Canada looked mixed, with the housing sector showing great difficulties.
Canada Ivey Purchasing Managers Index for January was released a while ago, showing an improvement. This month, the Ivey PMI SA came at 56.5 points, compared to 56.3 points in January, with the unadjusted PMI number jumped to 54.4 points vs. 43.7 points last month, however, the employment index slowed slightly to 57.2 points, compared to 57.9 points previously, as did the price index which slowed to 62.2 points from 64.5 points last month. Inventories increased above breakeven to 50.3 points compared to 49.1 points last month., however, the supplier deliveries cooled off to 51.8 points compared to 57.8 points in January
USD/CAD Daily Chart – Stopping at the 100 SMA
Canada Building permits for December 2023
- Building permits tumbled -14.0% in December to $9.2 billion. The decline was the lowest since October 2020
- Prior month -3.9% (were expecting -1.7%) revised to -5.0%
- Declines were recorded in both residential and nonresidential sectors
- On a constant dollar basis, a total value of building permits fell -14.2% to $5.8 billion in December
Residential:
- Total value of residential permits decreased by 17.9% to $5.7 billion in December.
- Significant drop in multi-unit construction intentions by 31.1%, amounting to a $1.3 billion decrease, marking the largest monthly drop in the series.
- Ontario experienced a 45.2% decline in the value of multi-unit permits, contributing to the overall monthly decrease in the residential sector, with a loss of $816.8 million.
- Construction intentions for single-family dwellings slightly increased by 0.8% to $2.9 billion in December.
- Alberta saw a notable gain of 15.3% or $84.4 million in single-family dwelling construction intentions, offsetting declines in seven provinces. This marked a fifth consecutive monthly increase for Alberta and the largest monthly value since January 2014.
Non-Residential:
- Non-residential sector permits value decreased by 7.0% to $3.6 billion in December.
- A significant decline in new major institutional construction intentions, particularly in Quebec (-55.8%; -$313.9 million), led to the overall drop.
- Despite the decline, there were gains in the commercial (+4.1%; +$69.1 million) and industrial (+4.7%; +$39.3 million) sectors across Canada.
- The substantial decline in Quebec is linked to the absence of new major institutional permits in December, following the issuance of two projects over $150 million each in November.
For the Q4
- Fourth quarter of 2023 saw the weakest quarterly aggregates since Q3 2021, with a total building permit value of $31.3 billion, a 9.0% decrease from the previous quarter and a 1.7% decrease from Q4 2022.
- Both non-residential and residential building permit values declined from Q3 to Q4 2023, with non-residential permits down 13.3% to $11.6 billion and residential permits down 6.3% to $19.7 billion.
- The single-family dwellings component was the only one to see a quarterly increase, rising 1.4% to $8.5 billion in Q4 2023, following a 9.8% increase in Q3.
- There was also a 2.9% increase in dwelling units authorized for single-family dwellings across Canada in Q4.
- Alberta experienced significant growth in single-family dwelling permits, with a 23.4% increase to $1.7 billion in Q4, marking the third consecutive quarterly rise. New dwelling units issued in Alberta also grew by 21.9% to 4,000 units in Q4, marking the third consecutive quarterly increase.
Such a rapid fall shows that the economy of Canada is in trouble. Certainly permits can be impacted by factors like weather as well as increasing interest rates by the Bank of Canada. Nonetheless, the chart shows that they are trending down, which means that the housing sector is having trouble and today’s numbers are somewhat of a shock.
USD/CAD Live Chart
ABOUT THE AUTHOR
See More
Sidebar rates
Add 3442
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals