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Economy

Canadian dollar gains as investors favor commodity-linked currencies

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The Canadian dollar strengthened against its U.S. counterpart on Thursday, adding to its gains the day before, as investors bet that commodity producing economies will take up the slack left by disruptions to Russia’s exports.

The loonie rose 0.3% to 1.2760 per greenback, or 78.37 U.S. cents, after trading in a range of 1.2751 to 1.2841. On Tuesday, the currency touched its weakest intraday level in 2-1/2 months at 1.2901.

The only other G10 currencies to gain ground on Thursday were the Australian and New Zealand dollars. Canada, Australia and New Zealand are major producers of commodities.

“Many people see the commodity story as a key driver right now,” said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC.

“Going forward, countries are going to need to replace the huge supply that Russia and Ukraine and maybe even Belarus have.”

Russia is one of the world’s biggest energy producers, and both it and Ukraine are among the top exporters of grain.

Oil, a key export for Canada, settled 2.5% lower at $106.02 a barrel but other commodities, such as gold and copper gained ground.

Gains for the loonie came despite losses on Wall Street, as data showed U.S. inflation climbing to a four-decade high, all but assuring the U.S. Federal Reserve would hike key interest rates at the conclusion of next week’s monetary policy meeting.

The Bank of Canada raised interest rates last week for the first time in three years. Canada’s jobs report for February, due on Friday, can help guide expectations for further tightening next month.

Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year touched its highest since Feb. 25 at 1.968% before dipping to 1.948%, up 4.5 basis points on the day.

 

(Reporting by Fergal Smith; editing by Jonathan Oatis)

Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

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OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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Economy

Statistics Canada says manufacturing sales fell 1.3% to $69.4B in August

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OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.

The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.

The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.

Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.

Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.

Overall manufacturing sales in constant dollars fell 0.8 per cent in August.

This report by The Canadian Press was first published Oct. 16, 2024.

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