The Canadian dollar continued to climb against the US dollar after dovish post rate decision rhetoric from Governor Dodge spurred declines earlier this week. Oil prices surged above $73/bbl, throwing strength behind the Loonie. Oil, along with other commodities, account for almost half of Canadian exports.
When asked if a surging Canadian dollar was “inevitable” to reach parity with the US dollar, Bank of Canada?s Governor Dodge responded, “I never use words like inevitable.” Dodge continued his statement, critiquing economists on their poor dollar predictions.
[I]Source: Financial Post[/I]
Shaw Communications Inc., an Ottawa based phone, cable, and internet company, reported lower third quarter earnings. Shaw earned 42 cents a share this quarter opposed to the 58 cents earned this quarter last year.
Rio Tinto CEO Thomas Albanese said he was ready to buy Alcan Inc. for $38.1 billion, creating the world?s biggest mining company. The bid came just two months after a takeover of the third biggest mining company.
[B]Currency Markets: USD/CAD
[/B]The Canadian dollar continued to climb against the US dollar after dovish post rate decision rhetoric from Governor Dodge spurred declines earlier this week. Oil prices surged above $73/bbl, throwing strength behind the Loonie. Oil, along with other commodities, account for almost half of Canadian exports. Yesterday, the Bank of Canada announced that inflation will reach as high as 3 percent - an entire percentage point higher than previous estimates - before inflationary pressures begin to cool. The new inflationary outlook along with Canadian CPI just around the corner boosted the Canadian dollar. The Canadian dollar was most recently quoted at 1.0486.
[B]Equity Markets: S&P/TSX Index[/B]
Despite today?s modest decline, Alcan set the pace for Toronto?s stock exchange, appreciating almost 50 percent since Rio Tinto?s $38.1 billion dollar bid. Additionally, Rio Tinto advisor Canadian Imperial Bank of Commerce tacked on 56 cents, up to $97.46 a share. Raging oil prices drove energy companies Suncor Energy and Husky Energy up $1.32 and 30 cents respectively. The S&P/TSX, Toronto?s leading equities index, was most recently quoted up 85.76 points to 14,441.76.
[B]Fixed Income Markets: Canadian Government 10-Year Bond
[/B]The Canadian 10-year continues to decline as investors looked to the booming equities markets to take profit. Yields sparked up after Bank of Canada announced inflation will continue to remain above its target level through the fourth quarter. With newly felt hawkish speculation circling the Bank of Canada, yields may continue to advance. The Canadian government 10-year bond was most recently quoted at 95.207, yielding 4.66 percent.