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2014.06.1006:37:55UTC+00Loonie firms up as Canada housing starts seen improving GDP

The Canadian dollar solidified versus the US dollar and surpassed other major counterparts on Monday following the figures showed Canadian housing starts appeared before anticipations in May.

A report from Canada Mortgage and Housing Corp. reflected seasonally adjusted annualized housing starts climbed to 198,324 last month, while April was modified higher to 196,687 units.

The data implied housing would contribute to economic growth in the 2nd quarter following an unusually cool winter put a chill on construction.

"Most of (the Canadian dollar) strength came in tandem with the stronger than expected housing starts number which, a combination of that and the slight revision to last month, would suggest that the housing market is providing more of a lift to GDP than anyone expected," said Camilla Sutton, Chief Currency Strategist at Scotiabank.

The loonie settled at C$1.0908 to the greenback, or 91.68 US cents, up from Friday's C$1.0930 or 91.49 US cents.

Meanwhile, Canadian government bond prices declined across the maturity curve, with the 2-year dropped 1.5 Canadian cents to 1.070%, and the benchmark 10-year erased 3 Canadian cents to 2.325%.

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