CAIRO (Reuters) – Thousands of Egyptians protested on Monday in Tahrir Square, the epicenter of an uprising that toppled President Hosni Mubarak this year, after a prominent activist was detained by military prosecutors.
Article source: http://news.yahoo.com/canada-not-happy-unesco-move-rethinking-role-015531567.html
TORONTO (Reuters) – Canada’s economic outlook is good, but growth is slowing and risks are tilted to the downside, with any external shock likely to be amplified by high consumer debt and house prices, the International Monetary Fund said on Monday.
The multinational agency said it expects growth in Canada’s gross domestic product to slow to about 2.0 percent in 2011 and 2012, a slightly downgrade from its September forecast and in line with the Bank of Canada’s outlook released last week.
Growth will be “constrained by weak demand in trading partners, a strong Canadian dollar and fiscal adjustment,” it said in a statement.
Canada is doing well economically, especially compared to fellow G7 countries, thanks in part to its resilient financial system and credible monetary and fiscal policy, but the “very unsettled external environment” threatens the outlook, the IMF said after its regular two-week assessment of the country.
“Important downside risks remain, including external headwinds from financial market spillovers of turmoil in Europe; a weaker U.S. economy; and lower commodity prices under a scenario of weaker global activity,” the IMF said in a statement.
It said the impact of a big global shock could be amplified by “elevated household debt and house prices” – the two imbalances most frequently cited by economists – but praised moves earlier this year by the government to restrain new mortgage debt and cool the housing market.
The challenge now for Canadian authorities is to return fiscal and monetary policy to a neutral level after the extraordinary measures in recent years aimed at countering the global financial crisis, the IMF said.
Still, the Fund appeared to support the Bank of Canada’s decision last week to hold official interest rates steady at an ultra-low 1 percent in the medium term, citing risks of a global slowdown, which would hurt Canadian exports and consumer confidence.
“In terms of monetary policy, an accommodative stance will remain appropriate for some time given stable inflation expectations, ongoing economic slack, forthcoming fiscal drag, and heightened external risks,” it said.
It also repeated advice to the Canadian government and the Bank of Canada to be ready to react quickly should the recovery falter, providing more stimulus with lower interest rates or higher deficit if needed to boost domestic demand.
While praising the government’s measures to curb the build-up in mortgage debt, the IMF said more measures may be needed to forestall the risk of a steep housing correction if prices and household debt continue to climb.
(Editing by Rob Wilson and Jeffrey Hodgson)
Article source: http://news.yahoo.com/canada-growth-moderating-external-risks-remain-imf-170247315.html
HOUSTON (Reuters) – Canada is toughening its tone on the Keystone XL pipeline, warning the Obama administration that rejection of TransCanada Corp’s $7 billion project could prompt Ottawa to concentrate on selling its oil-sands-derived crude to Asian customers instead.
“What will happen if there wasn’t approval — and we think there will be — is that we’ll simply have to intensify our efforts to sell the oil elsewhere,” Joe Oliver, Canada’s natural resources minister, told Reuters on Monday.
In the face of rising environmental opposition to the planned pipeline, which would carry 700,000 barrels per day of supply from Canada’s oil sands projects to refineries on the U.S. Gulf Coast, the Obama administration has signaled that it may miss a year-end target for approval.
Oliver said a delay by the Obama administration would not be fatal to the project, and that TransCanada has multiple options — including customers in Asia.
“It may be other parts of the United States, it may be a rerouted pipeline, and then, of course, there’s Asia,” Oliver said in an interview.
The increasingly heated debate pits environmental groups and some politicians raising fears over ecological destruction against other lawmakers and TransCanada, who say the project will create jobs and bolster energy security.
“While we still hope to make a decision by the end of the year, we are first and foremost committed to a thorough, transparent and rigorous review process,” a U.S. official said last week on condition of anonymity.
The ruling falls to the State Department because the line crosses national borders. The decision has already been pushed back once.
Following Environmental Protection Agency complaints about its initial analysis, the State Department said it would undertake a supplemental review.
ENERGY SUPERPOWER
Oliver said delay or disapproval of the U.S. segment would not change the fact that Canada is “a global energy superpower” with 174 billion barrels of oil reserves, the vast bulk of it in the oil sands of northern Alberta.
He argued that thousands of miles of oil and gas pipelines already cross the Ogallala aquifer, the focus of environmental concern, and that Keystone would have more safeguards and newer technology than all of them.
He noted Enbridge Inc has proposed a $5.6 billion pipeline from northern Alberta to Canada’s Pacific Coast to export oil to Asia, and regulatory approval is a year or a year and a half away.
That proposal is also controversial. Several native groups in British Columbia have said they will not support the line crossing their lands under any circumstances.
“What we want to do in respect to Asia, that objective is not mutually exclusive with the Keystone pipeline. We have a lot of oil and we want to get it to welcoming markets and open markets,” Oliver said.
“And there are also possibilities of moving it east as well. We just have to look at the whole picture. But there would be a delay, and that wouldn’t be positive for either country in our view,” he said.
There have been no private assurances between the U.S. and Canadian governments that the pipeline will be approved, although analysts have suggested the Obama administration will eventually back the project.
(Additional reporting by Arshad Mohammed in Washington, editing by Chris Baltimore and Dale Hudson)
Article source: http://news.yahoo.com/canada-toughens-tone-keystone-approval-171332090.html
OTTAWA, ONTARIO — His Excellency the Right Honourable David Johnston, Governor General of Canada, will deliver the opening remarks at The Canada-U.S. Partnership: Enhancing the Innovation Ecosystem conference, on Wednesday, November 2, 2011, at 8:00 a.m., at the Fairmont Chateau Laurier, in Ottawa.
The Governor General will encourage participants to think and dream of the different ways in which both Canada and the United States can continue to be leaders in innovation. His Excellency believes that learning and innovation are key components in establishing a smart and caring nation, and has incorporated these principles into the three pillars of his mandate as the 28th governor general of Canada.
About the Canada-U.S. Partnership conference
Co-hosted by Canada 2020 and the Embassy of the United States in Ottawa, The Canada-U.S. Partnership: Enhancing the Innovation Ecosystem conference will bring together North American business, government and academic leaders to discuss and debate four key areas: North American Innovation Policy; Canada-U.S. University Partnerships; Financing North American Business Innovation; and Managing Innovation. For more information, visit www.canada2020.ca/innovation.
Follow GGDavidJohnston and RideauHall on Facebook and Twitter
© Marketwire 2011
Article source: http://www.msnbc.msn.com/id/45108796
HOUSTON |
HOUSTON (Reuters) – Canada is toughening its tone on the Keystone XL pipeline, warning the Obama administration that rejection of TransCanada Corp’s $7 billion project could prompt Ottawa to concentrate on selling its oil-sands-derived crude to Asian customers instead.
“What will happen if there wasn’t approval — and we think there will be — is that we’ll simply have to intensify our efforts to sell the oil elsewhere,” Joe Oliver, Canada’s natural resources minister, told Reuters on Monday.
In the face of rising environmental opposition to the planned pipeline, which would carry 700,000 barrels per day of supply from Canada’s oil sands projects to refineries on the U.S. Gulf Coast, the Obama administration has signaled that it may miss a year-end target for approval.
Oliver said a delay by the Obama administration would not be fatal to the project, and that TransCanada has multiple options — including customers in Asia.
“It may be other parts of the United States, it may be a rerouted pipeline, and then, of course, there’s Asia,” Oliver said in an interview.
The increasingly heated debate pits environmental groups and some politicians raising fears over ecological destruction against other lawmakers and TransCanada, who say the project will create jobs and bolster energy security.
“While we still hope to make a decision by the end of the year, we are first and foremost committed to a thorough, transparent and rigorous review process,” a U.S. official said last week on condition of anonymity.
The ruling falls to the State Department because the line crosses national borders. The decision has already been pushed back once.
Following Environmental Protection Agency complaints about its initial analysis, the State Department said it would undertake a supplemental review.
ENERGY SUPERPOWER
Oliver said delay or disapproval of the U.S. segment would not change the fact that Canada is “a global energy superpower” with 174 billion barrels of oil reserves, the vast bulk of it in the oil sands of northern Alberta.
He argued that thousands of miles of oil and gas pipelines already cross the Ogallala aquifer, the focus of environmental concern, and that Keystone would have more safeguards and newer technology than all of them.
He noted Enbridge Inc has proposed a $5.6 billion pipeline from northern Alberta to Canada’s Pacific Coast to export oil to Asia, and regulatory approval is a year or a year and a half away.
That proposal is also controversial. Several native groups in British Columbia have said they will not support the line crossing their lands under any circumstances.
“What we want to do in respect to Asia, that objective is not mutually exclusive with the Keystone pipeline. We have a lot of oil and we want to get it to welcoming markets and open markets,” Oliver said.
“And there are also possibilities of moving it east as well. We just have to look at the whole picture. But there would be a delay, and that wouldn’t be positive for either country in our view,” he said.
There have been no private assurances between the U.S. and Canadian governments that the pipeline will be approved, although analysts have suggested the Obama administration will eventually back the project.
(Additional reporting by Arshad Mohammed in Washington, editing by Chris Baltimore and Dale Hudson)
Article source: http://in.reuters.com/article/2011/10/31/us-keystone-oliver-idINTRE79U5BV20111031
* Sees growth of 2 pct in 2011, 2012
* Soft demand in trading partners a constraint
* IMF says medium-term outlook broadly favorable
TORONTO, Oct 31 (Reuters) – Canada’s economic outlook is
good, but growth is slowing and risks are tilted to the
downside, with any external shock likely to be amplified by
high consumer debt and house prices, the International Monetary
Fund said on Monday.
The multinational agency said it expects growth in Canada’s
gross domestic product to slow to about 2.0 percent in 2011 and
2012, a slightly downgrade from its September forecast and in
line with the Bank of Canada’s outlook released last week.
Growth will be “constrained by weak demand in trading
partners, a strong Canadian dollar and fiscal adjustment,” it
said in a statement.
Canada is doing well economically, especially compared to
fellow G7 countries, thanks in part to its resilient financial
system and credible monetary and fiscal policy, but the “very
unsettled external environment” threatens the outlook, the IMF
said after its regular two-week assessment of the country.
“Important downside risks remain, including external
headwinds from financial market spillovers of turmoil in
Europe; a weaker U.S. economy; and lower commodity prices under
a scenario of weaker global activity,” the IMF said in a
statement.
It said the impact of a big global shock could be amplified
by “elevated household debt and house prices” – the two
imbalances most frequently cited by economists – but praised
moves earlier this year by the government to restrain new
mortgage debt and cool the housing market.
The challenge now for Canadian authorities is to return
fiscal and monetary policy to a neutral level after the
extraordinary measures in recent years aimed at countering the
global financial crisis, the IMF said.
Still, the Fund appeared to support the Bank of Canada’s
decision last week to hold official interest rates steady at an
ultra-low 1 percent in the medium term, citing risks of a
global slowdown, which would hurt Canadian exports and consumer
confidence.
“In terms of monetary policy, an accommodative stance will
remain appropriate for some time given stable inflation
expectations, ongoing economic slack, forthcoming fiscal drag,
and heightened external risks,” it said.
It also repeated advice to the Canadian government and the
Bank of Canada to be ready to react quickly should the recovery
falter, providing more stimulus with lower interest rates or
higher deficit if needed to boost domestic demand.
While praising the government’s measures to curb the
build-up in mortgage debt, the IMF said more measures may be
needed to forestall the risk of a steep housing correction if
prices and household debt continue to climb.
Article source: http://uk.reuters.com/article/2011/10/31/imf-canada-idUST5E7L601W20111031
Canada’s gross domestic product
gained for a third month in August on higher oil production,
suggesting that global market turmoil during the month didn’t
derail the world’s 10th largest economy.
Real GDP rose 0.3 percent on a seasonally adjusted basis,
Statistics Canada said today in Ottawa. Economists expected a
0.2 percent gain, according to the median estimate in a
Bloomberg survey with 24 responses. The agency also raised its
July growth estimate to 0.4 percent from an initially reported
0.3 percent.
The data add to evidence that growth resumed in the third
quarter after shrinking in the April-to-June period, when wet
weather slowed work on energy projects in western Canada and
Japan’s earthquake and tsunami disrupted automobile production.
The report is unlikely to prompt changes to Bank of Canada
interest rates though, as policy makers gauge the longer-term
impact of a deepening of Europe’s debt crisis and concerns about
U.S. growth, said Royal Bank of Canada’s Paul Ferley.
The data “is probably not going to result in any shift in
policy,” said Ferley, assistant chief economist at Royal Bank
in Toronto, by telephone. The central bank will “probably take
some comfort you’ve got more momentum in the economy to
withstand the headwinds, especially if they intensify,” he
said.
The Canadian currency, which had a fourth weekly advance
last week on optimism Europe’s leaders will manage to contain
the region’s crisis, outperformed a majority of its most-traded
peers today. It fell 0.6 percent to 99.78 cents per U.S. dollar
at 4:05 a.m. in Toronto.
Today’s GDP data suggest a 2.8 percent annualized expansion
in the third quarter, Ferley said. The Bank of Canada cut its
growth forecasts last week through the middle of 2012,
projecting annualized growth of 2 percent in the third quarter
and 0.8 percent in the final three months of this year.
The central bank’s fourth quarter forecast looks “very
weak to me,” Ferley said.
Statistics Canada said energy output gained 2.8 percent in
August, the third straight rise, as the industry rebounded from
an earlier decline that resulted from poor weather conditions in
western Canada. Spring breakup, when wet weather prevents rigs
from working in marshy western Canadian fields, lasted longer
than usual this year because of late snowfall. Wildfires also
swept across northern Alberta, the biggest energy-producing
province.
The picture was mixed in other industries with Canada’s
inflation-adjusted output excluding energy unchanged in August,
the statistics agency said.
The finance and insurance sector rose 1.4 percent in
August, partly due to higher stock trading volume, the agency
said. Other industries recording gains were construction and
retail trade.
Manufacturing fell 0.4 percent and output of utilities was
down 0.8 percent during the month. Wholesale trade recorded a
1.4 percent decrease.
“While sporting a snappy headline, underlying GDP growth
was much less impressive,” Doug Porter, deputy chief economist
at BMO Capital Markets in Toronto, said in a note to investors.
“Much as the Q2 decline for GDP was largely driven by special
factors, so, too, was the Q3 rebound.”
Finance Minister Jim Flaherty said today’s data are
consistent with the government’s expectations of “modest”
growth for the nation’s economy.
“The GDP figures were a little bit better than the market
expected, but it’s still 0.3% for the month of August, so this
is reflective of modest growth, which is what we have
anticipated and which we expect to continue,” Flaherty told
reporters in Trenton, Ontario.
Gross domestic product grew 2.4 percent in August from the
same month a year earlier, Statistics Canada said, the same as
July’s revised pace.
In a separate report, the agency said the industrial
product price index rose 0.4 percent in September from August,
faster than the 0.2 percent median estimate in a Bloomberg
survey of 13 economists.
The raw-materials price index increased 1.4 percent in
September on higher prices for crude oil. The gain was larger
than all forecasts in a Bloomberg survey of 11 economists that
had a median estimate of a 1.9 percent decrease.
Over the 12 months ending in September, industrial prices
rose 5.3 percent while raw-materials costs jumped 15.2 percent,
suggesting factory profit margins have been shrinking.
To contact the reporter on this story:
Theophilos Argitis in Ottawa at
targitis@bloomberg.net
To contact the editors responsible for this story:
Chris Wellisz at
cwellisz@bloomberg.net;
David Scanlan at
dscanlan@bloomberg.net
Please enable JavaScript to view the comments powered by Disqus.
Article source: http://www.bloomberg.com/news/2011-10-31/canada-s-gdp-expanded-0-3-in-august-on-higher-energy-production.html
October 31, 2011, 5:13 PM EDT
By Kaitlyn Kiernan and Matt Walcoff
Oct. 31 (Bloomberg) — Canadian stocks fell, paring a monthly gain, as energy and raw material producers declined with commodity prices after Japan moved to weaken its currency against the U.S. dollar.
Barrick Gold Corp., the world’s largest producer of the metal, lost 2.6 percent as the U.S. Dollar Index surged the most since December 2008. Suncor Energy Inc., Canada’s largest oil and gas producer, dropped 4 percent. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, slid 6.1 percent after the industrial metal declined as investors awaited details on European leaders’ revamped strategy for curbing the region’s debt crisis.
The Standard Poor’s/TSX Composite Index decreased 267.45 points, or 2.1 percent, to 12,252.06.
“On the last day of the month anything can happen,” Brendan Caldwell, chief executive officer of Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm manages C$1 billion ($963 million). “The strength in the U.S. dollar has caused gold to come off. So much of the Canadian economy is still raw materials and not finished products that a move here or there makes a difference.”
The SP/TSX rallied 5.4 percent this month for its biggest increase since May 2009 after falling each of the previous seven months. Oil and raw materials shares led gains as investors speculated European leaders’ move to boost the region’s rescue fund will prevent the debt crisis from weakening banks and the broader economy.
Japan sold yen for the third time this year and pledged more sales after the currency’s gain to a post-World War II high against the dollar threatened a recovery from the March earthquake and nuclear disaster.
The SP/TSX Materials Index retreated, ending a six-day streak of advances.
Gold Miners
Gold producers fell after the metal dropped as the U.S. dollar surged, reducing demand for the precious metal as an alternative investment. Barrick lost 2.6 percent to C$49.21. Goldcorp Inc., the world’s second-largest company in the industry by market value, slipped 2.3 percent to C$48.50. Semafo Inc., which mines in West Africa, decreased 8.1 percent to C$7.65.
Energy shares retreated the most in four weeks as oil dropped. Suncor declined 4 percent to C$31.75. Cenovus Energy Inc., the country’s fifth-biggest energy company by revenue, declined 5.2 percent to C$34.14. Precision Drilling Corp., Canada’s largest contract drilling company, tumbled 7.4 percent to C$11.56.
Copper producers fell as the metal dropped after surging the most since at least 1988 last week. First Quantum lost 6.1 percent to C$20.91. Teck Resources Ltd., Canada’s largest base- metals and coal producer, decreased 3.7 percent to C$39.96. Lundin Mining Corp., which operates in Europe, retreated 4.6 percent to C$3.91.
Potash Corp.
Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, sank 4.9 percent to C$47.18 as corn and wheat fell. Agricultural commodities declined as a stronger dollar eroded prospects for U.S. exports.
The SP/TSX Industrials Index fell 2.6 percent, trimming the biggest monthly advance since November 2001. The index lost 19 percent in the third quarter, its worst slide since 2002.
Canadian Pacific Railway Ltd., the country’s second-biggest railroad, decreased 7.1 percent, the most since December 2008, to C$61.61 after jumping 7.9 percent Oct. 28, when William Ackman’s Pershing Square Capital Management LP bought a 12 percent stake in the company.
Cameron Doerksen, an analyst at National Bank of Canada, cut his rating on the shares to “underperform” from “sector perform,” while Turan Quettawala, an analyst at Bank of Nova Scotia, reduced his rating to “sector perform” from “sector outperform.” In a note to clients, Doerksen said Pershing Square’s acquisition may lead to management changes that are unlikely to affect earnings in the near term.
Monthly Surge
Canadian National Railway Co., the country’s largest railroad, lost 2.3 percent to C$78.08, trimming its biggest monthly gain since October 2006. Bombardier Inc., the maker of trains and airplanes, decreased 6.6 percent to C$4.12 after rallying 8.1 percent Oct. 28.
Grande Cache Coal Corp., which mines in Alberta, surged a record 68 percent to C$9.87 after China’s Winsway Coking Coal Holdings Ltd. and Japan’s Marubeni Corp. agreed to buy the Calgary-based metallurgical coal producer for C$10 a share in cash.
Cline Mining Corp., which is developing coal mines in Canada and the U.S., rallied 19 percent, the most this year, to C$2.11. The company may be the next in the industry to be acquired, Marc Johnson, an analyst at M Partners Inc., said in a note to clients.
Pacific Northern
Natural gas-pipeline company Pacific Northern Gas Ltd. rose a record 20 percent to C$36.67 after agreeing to be bought by AltaGas Ltd., a natural gas extraction and transmission company, for C$36.75 a share in cash. AltaGas fell 1.7 percent to C$29.41.
Technology-patent owner Wi-LAN Inc. gained 8 percent to C$7.42 after saying it doesn’t intend to raise its C$532 million bid for Mosaid Technologies Inc. Mosaid agreed Oct. 27 to be bought by Sterling Partners for C$590 million.
–Editors: Joanna Ossinger, Stephen Kleege
Matt Walcoff in Toronto at mwalcoff1@bloomberg.net
To contact the reporter on this story: Kaitlyn Kiernan in New York at kkiernan2@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
Article source: http://www.businessweek.com/news/2011-10-31/canada-stocks-drop-as-japan-currency-move-hurts-commodity-prices.html
HOUSTON |
HOUSTON (Reuters) – Canada is toughening its tone on the Keystone XL pipeline, warning the Obama administration that rejection of TransCanada Corp’s $7 billion project could prompt Ottawa to concentrate on selling its oil-sands-derived crude to Asian customers instead.
“What will happen if there wasn’t approval — and we think there will be — is that we’ll simply have to intensify our efforts to sell the oil elsewhere,” Joe Oliver, Canada’s natural resources minister, told Reuters on Monday.
In the face of rising environmental opposition to the planned pipeline, which would carry 700,000 barrels per day of supply from Canada’s oil sands projects to refineries on the U.S. Gulf Coast, the Obama administration has signaled that it may miss a year-end target for approval.
Oliver said a delay by the Obama administration would not be fatal to the project, and that TransCanada has multiple options — including customers in Asia.
“It may be other parts of the United States, it may be a rerouted pipeline, and then, of course, there’s Asia,” Oliver said in an interview.
The increasingly heated debate pits environmental groups and some politicians raising fears over ecological destruction against other lawmakers and TransCanada, who say the project will create jobs and bolster energy security.
“While we still hope to make a decision by the end of the year, we are first and foremost committed to a thorough, transparent and rigorous review process,” a U.S. official said last week on condition of anonymity.
The ruling falls to the State Department because the line crosses national borders. The decision has already been pushed back once.
Following Environmental Protection Agency complaints about its initial analysis, the State Department said it would undertake a supplemental review.
ENERGY SUPERPOWER
Oliver said delay or disapproval of the U.S. segment would not change the fact that Canada is “a global energy superpower” with 174 billion barrels of oil reserves, the vast bulk of it in the oil sands of northern Alberta.
He argued that thousands of miles of oil and gas pipelines already cross the Ogallala aquifer, the focus of environmental concern, and that Keystone would have more safeguards and newer technology than all of them.
He noted Enbridge Inc has proposed a $5.6 billion pipeline from northern Alberta to Canada’s Pacific Coast to export oil to Asia, and regulatory approval is a year or a year and a half away.
That proposal is also controversial. Several native groups in British Columbia have said they will not support the line crossing their lands under any circumstances.
“What we want to do in respect to Asia, that objective is not mutually exclusive with the Keystone pipeline. We have a lot of oil and we want to get it to welcoming markets and open markets,” Oliver said.
“And there are also possibilities of moving it east as well. We just have to look at the whole picture. But there would be a delay, and that wouldn’t be positive for either country in our view,” he said.
There have been no private assurances between the U.S. and Canadian governments that the pipeline will be approved, although analysts have suggested the Obama administration will eventually back the project.
(Additional reporting by Arshad Mohammed in Washington, editing by Chris Baltimore and Dale Hudson)
Article source: http://www.reuters.com/article/2011/10/31/us-keystone-oliver-idUSTRE79U5BV20111031
Canada’s dollar fell against its
U.S. counterpart as concern that European leaders will struggle
to rein in the region’s debt crisis eroded risk appetite.
The currency declined after Japan intervened in currency
markets to weaken the yen, sending the U.S. dollar higher
against all of its 16 major counterparts. The loonie, as the
currency is nicknamed, was headed for a 5.4 percent gain this
month, the most since it rose 7.9 percent in July 2009.
“Sentiment in markets now is still a bit negative,” said
Mark McCormick, a currency strategist at Brown Brothers Harriman
Co. in New York, in a phone interview. “There’s stress in the
European banking system that’s weighing on equities and risk-
correlated currencies such as the Canadian dollar.”
Canada’s currency fell 0.5 percent to 99.64 cents per U.S.
dollar at 10:58 a.m. in Toronto. One Canadian dollar buys
$1.0036.
The Standard Poor’s 500 Index fell 1.2 percent while
Canada’s benchmark SP/TSX Composite Index was down 0.7 percent.
Volatility in the Canadian dollar versus the greenback rose
for the first time in seven days after reaching the lowest level
in more than a month. One-month implied volatility on the
currency pair climbed to 11.3 percent today. It dropped to 11
percent at the end of last week, the lowest level since Sept.
21. It climbed as high as 16 percent on Oct. 4. The average
during the past five years is 11.6 percent.
Implied volatility, which traders quote and use to set
option prices, signals the expected pace of swings in the
underlying currency.
Canada’s government bonds rose, pulling the benchmark 10-
year yield down eight basis points, or 0.08 percentage point, to
2.35 percent. The price of the 3.25 percent security maturing in
June 2021 climbed 71 cents to C$107.71.
Canadian government bonds have lost 1.5 percent this month,
according to a Bank of America Merrill Lynch index.
The Canadian currency, which capped a fourth weekly advance
on Oct. 28 on optimism Europe’s leaders will manage to contain
the region’s debt crisis, outperformed a majority of its most-
traded peers today. The loonie briefly pared losses after
Statistics Canada reported the nation’s economy expanded in
August for a third straight month.
McCormick said he sees the Canadian dollar weakening to
C$1.02 by year-end.
“It hinges on the euro zone,” McCormick said. “Euro-zone
markets are going to be on the defensive for the rest of the
year. With the euro-zone banking crisis driving risk sentiment,
the Canadian dollar is going to get caught up in that.”
Euro-region’s leaders agreed on Oct. 27 to increase their
bailout fund to 1 trillion euros ($1.4 trillion), recapitalize
banks and convinced banks to write down their holdings of Greek
debt by 50 percent. While the help of China and cooperation of
the International Monetary Fund were immediately sought, pledges
of hard cash are proving hard to come by as Group of 20 members
press for more details of the plan.
“The details of the euro package will be the catalyst for
how markets react for the rest of the calendar year,” said
Firas Askari, head of currency trading in Toronto at Bank of
Montreal’s BMO Capital Markets unit, by e-mail. “I like the
Canadian dollar fundamentally, but if one anticipates another
risk-off scenario before year-end, then there will probably be
better levels to buy.”
Canada’s gross domestic product gained for a third month in
August, rising 0.3 percent during the month on a seasonally
adjusted basis. Economists expected a 0.2 percent gain,
according to the median estimate in a Bloomberg survey with 24
responses. The agency also raised its July growth estimate to
0.4 percent from an initially reported 0.3 percent.
“The big news is the Japan intervention,” BMO’s Askari
said. “Domestic numbers are of secondary importance. The key
determinants of the Canadian dollar’s fate are nondomestic in
nature.”
To contact the reporter on this story:
Chris Fournier in Halifax, Nova Scotia at
cfournier3@bloomberg.net
To contact the editor responsible for this story:
Dave Liedtka at
dliedtka@bloomberg.net
Article source: http://www.bloomberg.com/news/2011-10-31/canada-s-dollar-declines-versus-greenback-after-japan-s-yen-intervention.html