C$ stays steady as U.S. holiday, Fed speculation, and housing market uncertainty loom

Canadian Dollar Holds Steady

With the U.S. hitting a break for its holiday, the Canadian dollar stayed pretty much on the same level against the U.S. dollar. Market movers were chill‑titled, trading as if everyone was still waiting for a holiday email.

Why the Calm?

The U.S. holiday left trading activity at a low‑key pace.
Investors are hanging back, playing a very quiet version of “market roulette.”

Diplomatic Dawn in Saudi Arabia

Tomorrow, first‑time US‑Russian talks are set to happen in Saudi Arabia – a big deal to ease the Ukraine‑Russia tension. The buzz has injected a wave of risk‑on sentiment, nudging the Canadian dollar higher.

Meanwhile, a steep drop in U.S. retail sales is making everyone think the Fed might cut rates by July. That thought is a bit of a drag on the U.S. dollar.

Housing Dynamics: The Tale of Starts & Stumbles

Inside Canada, housing data was a mixed bag.

Seasonally adjusted housing starts (SAAR) jumped 3% in January.
However, the six-month trend dipped 2.5%, hinting that momentum isn’t as strong as the one‑month rush.
Urban annual starts rose 7% – Montreal and Vancouver pumped up new construction, especially multi‑unit projects.
Toronto told a different story, taking a big hit on new builds.

Ms. CMHC didn’t hide her worries. She forecasts a slowdown in starts between 2025 and 2027, putting a strain on the economy and the direction of the Canadian dollar.