USD/CAD continues the winning streak near 1.3720 due to risk-on sentiment

• USD/CAD extends gains on the third successive day due to risk aversion.
• Canada’s Housing Starts increased to 270.5K against the market expectations of 240.0K and the previous 250.4K.
• Higher US Treasury yields provide support to underpinning the US Dollar.

USD/CAD extends the winning streak on the third successive day, trading higher near 1.3720 during the Asian session on Thursday. Despite the better-than-expected Canada housing data, the pair receives upward support due to the risk-on sentiment.

Canada Mortgage and Housing Corporation released Housing Starts s.a (YoY) for September, increasing to 270.5K against the market expectations of 240.0K and the previous 250.4K. Moreover, the Loonie Dollar (CAD) is on a downward slide, dancing hand in hand with declining Crude Oil prices.

The conflict in the Gaza Strip is intensifying following a rocket attack on a hospital that resulted in the death of over 500 civilians. Accusations are flying between Israel and Hamas regarding the explosion at the building.

US Dollar Index (DXY) is staging a comeback after recent losses, possibly influenced by economic data from the United States (US). Adding to the intrigue, there are dovish remarks from multiple Federal Reserve officials, signaling a cautious stance by the central bank. There's a prevailing reluctance to tighten monetary policy amidst the current economic climate.

The US housing market is a bit of a rollercoaster, keeping everyone on their toes with mixed signals. On the positive side, Building Permits in September surpassed expectations, painting a rosy scenario. Meanwhile, Housing Starts saw a rebound, though slightly below the market consensus, introducing a layer of complexity to the storyline.

To broaden the view, the Beige Book's observation noting "little to no change" in economic activity during September and early October provides a more comprehensive perspective.

Thursday is gearing up to deliver a significant infusion of economic insights to the US. On the agenda are Existing Home Sales, the Philly Fed index, and the weekly Jobless Claims report, offering a comprehensive examination of various economic aspects. Canada’s Retail Sales will be eyed on Friday.