The Canadian dollar’s plunge to a 12-year low is seen boosting sales for the country’s retailers in 2016 as fewer shoppers cross the border south, but profit growth will vary depending on their ability to control import costs and push through price increases.
The currency has lost roughly a third of its value against the U.S. dollar since the start of 2014 as weaker prices for oil, a key Canadian export, triggered a mild recession last year. It fell to less than 71 U.S. cents this week.
For once, Claude Brochu is on the right side of a slide in the Canadian dollar.
Mr. Brochu spent years struggling against a low loonie, when he was president, and eventually part owner, of the Montreal Expos from 1986 through 1999. Baseball fans in Montreal paid for tickets in Canadian dollars; the Expos paid players in U.S. greenbacks. So Mr. Brochu fielded not the team he wanted, but the team his poor, devalued loonies could afford.
OTTAWA — High-profile central banker Mark Carney is taking it on the chin these days with blows landing from both sides of the Atlantic.
The former Bank of Canada governor, who made international news last year by jumping ship to head the storied Bank of England, has been undergoing a serious grilling in London over the bank’s tame response to manipulation of foreign exchange rates.
And in Canada, CIBC chief economist Avery Shenfeld has written a note suggesting Carney may have left his successor, Stephen Poloz, with an economy more damaged than it needed to be.
In 2002, when Milt Stegall was into his prime earning years as a slotback in the Canadian Football League, the Canadian dollar delivered an unexpected pay cut. That was the year the value of the loonie sunk to US$0.62, punishing American players who were earning a living in Canadian funds.
The exchange rate basically held his money hostage.
For Teck Resources Ltd. Chief Executive Donald Lindsay, every cent knocked off the value of the Canadian dollar is worth $62 million.
As Chinese economic growth slows, that’s been a rare bit of good news for the world’s second-largest seaborne exporter of coal used in steelmaking, which was forced to take a $30 million writedown on its inventory in the first quarter as the commodity’s price plunged to its lowest level in six years.
Iceland let its banks fail in 2008 because they proved too big to save.
Now, the island is finding crisis-management decisions made half a decade ago have put it on a trajectory that’s turned 2 percent unemployment into a realistic goal.
While the euro area grapples with record joblessness, led by more than 25 percent in Greece and Spain, only about 4 percent of Iceland’s labor force is without work. Prime Minister Sigmundur D. Gunnlaugsson says even that’s too high.
If you look at the fundamental factors driving the Canadian dollar, we think the outlook is all down
The loonie is set to fly south — soon, say TD economists, who are leading the bears with their forecast that Canada’s currency will drop as low as 90 US cents over the next year.
For the first time Canada’s loonie will join the U.S. greenback, euro and yen as official reserve currencies in International Monetary Fund data. The IMF said the Canadian and Australian dollar will be included in its Composition of Official Foreign Exchange Reserves from the third quarter. They’ve previously been included in an “other currencies” category in the COFER reports.