*
Canadian dollar weakens 0.4% against greenback
*
Touches five-day low at 1.3440
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Canadian housing starts fall 13% in January
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Ten-year yield touches its highest since Dec. 30
(Adds details throughout, updates prices)
TORONTO, Feb 15 (Reuters) - The Canadian dollar fell
against its U.S. counterpart on Wednesday as the prospect of
additional interest rate hikes by the Federal Reserve weighed on
investor sentiment and domestic data showed weakening in the
housing market.
Wall Street was mixed and the U.S. dollar rose
against a basket of major currencies after the release of
stronger-than-expected U.S. retail sales data, which could offer
more room for the U.S. central bank to raise interest rates.
It followed data on Tuesday showing U.S. inflation that was
stickier than expected.
The price of oil, one of Canada's major exports, was also
pressured by expectations of further interest rate hikes as well
as signs of ample U.S. supplies.
U.S. crude prices settled down 0.6% at $78.59 a
barrel, while the Canadian dollar was trading 0.4% lower
at 1.3390 to the greenback, or 74.68 U.S. cents, after touching
its weakest level since Friday at 1.3440.
Canadian home sales fell 3% in January from December and
were down 37.1% on an annual basis after a rapid increase in
borrowing costs since March last year.
Housing starts were also down in January, falling 13% from
the previous month in a sign that building activity has started
to cool.
Data for December showed a decline of 1.5% for factory sales
and a drop of 0.8% for wholesale trade.
Canadian government bond yields climbed across a steeper
curve. The 10-year touched its highest level since
Dec. 30 at 3.312% before dipping to 3.291%, up 10.5 basis points
on the day.
(Reporting by Fergal Smith; Editing by Paul Simao and Jonathan
Oatis)
