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President Donald Trump took fresh aim at the U.S. currency

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President Donald Trump took fresh aim at the U.S. currency on Thursday, taking a step closer to scrapping longstanding White House support for a strong dollar.

“One would think that I would be thrilled with our very strong dollar. I am not!” Trump said in a tweet. “The Fed’s high interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for our great manufacturers” to compete, identifying Caterpillar Inc., Boeing Co. and Deere & Co.

Trump’s tweets escalate his complaints over the dollar’s value and the Federal Reserve as he wages an increasingly heated trade war with China. The attack comes days after his administration branded China a currency manipulator and the president himself told reporters on July 26 that he had not ruled out intervention to weaken the dollar.

Trump vowed to crack down on China during his 2016 White House bid and has placed his economic record at the center of his campaign to win re-election next year.

The dollar has gained against nearly all of its Group of 10 peers this year. A trade-weighted index of the greenback adjusted for inflation is close to its highest point since 2003, showing the headwinds U.S. exports face.

“With substantial Fed Cuts (there is no inflation) and no quantitative tightening, the dollar will make it possible for our companies to win against any competition,” the president said Thursday. The Fed cut rates last week and ended the gradual shrinking of its balance sheet, which Trump calls quantitative tightening.

The dollar slipped following the president’s comments and analysts said investors were concerned that the risk of a Trump currency intervention was growing.

“The initial reaction was quite sharp, and probably reflects heightened anxiety around U.S. FX intervention,” said Erik Nelson, a currency strategist at Wells Fargo. He said the risk is “still moderate and pretty well below 50%, but the developments this week probably raised the probability somewhat.”

Contradictory statements from the White House have not helped to clarify the position. Top Trump economic adviser Larry Kudlow said on July 26 that the administration had ruled out currency intervention. A few hours later, the president told reporters “I didn’t say I’m not going to do something” on the dollar. Kudlow doubled down on Aug. 5, repeating during an interview on Bloomberg Television that intervention was off the table.

Concern over the trade war has roiled U.S. stocks since Trump announced the day after the Fed cut rates that he was was prepared to raise tariffs on US$300 billion of Chinese imports on Sept. 1. Beijing retaliated by allowing the yuan to slide past the key level of 7 per dollar for the first time since 2008.

Global Slowdown

Fed Chairman Jerome Powell said last week that businesses have reduced investment largely because of weak demand and a global slowdown, rather than high interest rates.

Companies “don’t come in and say, ‘We’re not investing because, you know, the federal funds rate is too high,”’ Powell said at a press briefing following the Fed’s quarter-point interest-rate cut. “I haven’t heard that from a business. What you hear is that demand is weak for their products.”

The strengthening dollar weighed on Caterpillar’s second-quarter results, especially with its gains against the euro and Australian dollar, the company said last month during an earnings call.

Others have voiced a different perspective.

General Motors Co. said currency fluctuations actually helped the company’s second-quarter earnings. The automaker was able to more than recoup price increases for its vehicles as a result of inflation in Argentina and Brazil, which helped operating profit during the quarter.

German sportswear maker Adidas AG said it’s more worried about a currency war between the U.S. and China than the possibility that Trump would increase tariffs on footwear.

“There is no winner in a currency war,“ Chief Executive Officer Kasper Rorsted said on a call with reporters earlier on Thursday. “Eventually everybody will lose because it will lead to a slowdown in the global economy.”

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City reacts to Aurora Cannabis announcement

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“I’ve been talking a lot about Aurora around Medicine Hat since April of 2018 and celebrating the fact that they came here, chose us over Quebec or anywhere else in Canada they could have gone, and what a great thing it is for the community and the jobs and just the optimism,” he said. “I’ve sensed an increase of optimism in the community.

“When I heard this news yesterday, it was a setback, and I’m disappointed. They’re a private company, this has nothing to do with the City of Medicine Hat. They’re free to make any decision they need to make.”

In its report, Aurora cited lower than expected revenue from cannabis as a reason for the decision.

The decision about the construction will save Aurora a total of $190 million dollars.

Lisa Kowalchuk, executive director of the Medicine Hat and District Chamber of Commerce, says she believes Aurora remains committed to Medicine Hat.

“Aurora has very much been committed to our community and very invested in our community,” she said. “They re very engaged within our community and with our chamber. So I don’t see them going away anytime soon.”

CHAT News attempted to speak with Aurora Cannabis on Friday, but were instead provided a statement, which clarified its position from Thursday.

“There has been no halt to construction at the facility,” wrote Michelle Lefler, VP Communications at Aurora, on Friday. “We are continuing to build with adjusted timelines that are more closely aligned with how cannabis markets develop.

The statement continues, “We expect to have at least six flower rooms completed and in operation in 2020, for a total of 238,000 square feet, which includes the mother room. As was done with Aurora Sky and is the case with all Sky-Class facilities, we will pursue a phased approach to bringing additional grow rooms online, and still intend to build 30 grow rooms at Sun.”

“Additional operations at the facility will be activated as global demand develops, with a target date for full operations in 2021. Previously, we had intended to build at an accelerated speed. This is a more normalized pace for a project of this size and is aligned with how markets are growing.”

The company adds they remain committed to investment in Medicine Hat, and still intends to hire around 800 people to work at the facility once its completed.

Clugston adds he remains optimistic about the facility being completed.

We remain committed to investment in the Medicine Hat community as planned. At this time, we still intend to hire a final staff complement of around 800 people upon facility completion. We want to make sure that all local and government partners continue to work with us to support our commitments to significant investment in Alberta’s economy.

“As an optimist, they’ve shown interest and invested obviously a lot of money in the facility, and I really do hope and believe that it will be up and running at 100 per cent,” he said.

Clugston says council will meet with Aurora executives in a closed-door session prior to Monday’s city council meeting. He adds the meeting was planned before Thursday’s announcement.

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CN conductors union gives 72-hour strike notice

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Canadian National Railways conductors, trainpersons and yardpersons have given strike notice ahead of a Tuesday deadline.

The union, which represents 3,200 workers, provided the 72-hour notice today as contract negotiations continue over the weekend.

The Teamsters Canada Rail Conference warned in October it was prepared to launch job action after over six months of unsuccessful talks.

A strike could begin at 12:01 a.m. on Nov. 19 now that the notice has been provided.

The company says its offer to enter into binding arbitration was declined by the union.

The workers, who are mostly located in major urban centres across Canada, have been without a contract since July 23.

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CN Rail confirms layoffs

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CN Rail has made the “difficult decision” to lay off an unspecified number of workers and take other measures to reflect demand.

A spokesperson for CN said some employees would be placed on furlough and management and union job numbers would be cut “due to a weakening of many sectors of the economy.”

“These adjustments have already started to take place across the network,” senior media relations adviser Alexandre Boulé said in an emailed statement.

“CN would like to express gratitude to the employees who will be leaving the company and thank them for their service.”

He would not confirm how many jobs would be affected.

The news was first reported by the Globe and Mail on Friday afternoon, citing a source that was not authorized to speak publicly. The Globe reported that there would be roughly 1,600 job losses in North America.

According to its website, CN transports more than $250 billion worth of goods annually across its 32,000-kilometre rail network within Canada and the U.S.

The company says it has about 24,000 staff.

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