Canadian Dollar Gains as Housing Starts Increase in August

By Daniel Kruger

Sept. 9 (Bloomberg) -- The Canadian dollar rose after a report showed housing starts increased during August.

Canada's dollar appreciated versus 13 of the 16 most- actively traded currencies. Canada Mortgage and Housing Corp. in Ottawa said new-home starts totaled 211,000 units on an annualized basis, up from 186,500 the month before. Economists predicted 191,000 starts, the median of 18 responses in a Bloomberg News survey.

The Canadian currency, dubbed the loonie because of the aquatic bird on the one-dollar coin, strengthened 0.2 percent to C$1.0624 per U.S. dollar at 8:18 a.m. in Toronto, from C$1.0649 yesterday. One Canadian dollar buys 94.11 U.S. cents.

The Canadian dollar has fallen 5 percent against the U.S. currency since July 11, when the price of crude oil peaked at $147.27 a barrel. The U.S. currency has rallied as demand for commodities has declined amid a global economic slowdown.

Canadian Prime Minister Stephen Harper called elections for Oct. 14, promising to continue delivering budget surpluses after a record 10 in a row and warning that a ``risky'' opposition plan to tax polluters would undermine an already slowing economy.

Liberal opposition leader Stephane Dion countered that his proposed levy on polluters would be used to spark growth with tax cuts and increased spending. He also pledged to help ailing manufacturing industries that he said Harper's Conservative Party has ignored.

The Bank of Canada estimates that the economy will grow 1 percent this year, the slowest since 1992.

To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net