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Sunday, October 28, 2012

Canadian dollar dips on interest-rate news and blocking of oil patch business takeover

   Canada column for Sunday, Oct. 28/12


   (c) By Jim Fox

   Canada’s dollar has dropped to just above parity with the U.S. currency after the country’s central bank said plans to raise interest rates are now “less imminent.”
    Bank of Canada, Mark Carney made the comment while cautioning that lagging global demand and high household debts are concerns to the country’s economic outlook.
   The bank kept its trendsetting interest rate at 1 percent and expectations are it might not be increased for at least another year.
   "Because of global headwinds, there is a need to provide very stimulative monetary policy," Carney said.
   “The case for adjustment of interest rates has become less imminent . . . but over time, rates are more likely to go up than not,” he added.
   The dollar is at a two-month low, down about two cents, and was also shaken by the Canadian government’s decision to block an oil-field takeover bid as being not in the national interests.
   Petronas, Malaysia’s government-run energy company, was rebuffed in its $5.2-billion proposed deal to take over Progress Energy Resources Corp. a Calgary-based natural gas business.


   Canada’s Conservative government will test its popularity next month in by-elections in three provinces to fill vacancies in the House of Commons.
   Prime Minister Stephen Harper said the votes will be held Nov. 26 in Victoria, Calgary Center and Durham (east of Toronto).
   The Victoria election resulted from the resignation of New Democrat Denise Savoie in August for health reasons while long-time Conservative politician Lee Richardson left to work for Alberta Premier Alison Redford in Calgary.
   Durham was previously represented by Conservative Bev Oda who retired after being ousted from her Cabinet position over an inquiry into her spending while on government trips.


   News in brief:
   - The U.S. might soon place armed border guards in Canada at the busy Peace Bridge crossing between Fort Erie, Ontario and Buffalo, N.Y. It is one of the options in a preliminary agreement to pre-inspect commercial vehicles before they cross the bridge and speed the flow of traffic and improve security. A second unnamed international crossing is also being considered for the 18-month pilot project.
   - Ontario’s Legislature will remain out of business for at least three more months until the Liberal party selects its new leader. Premier Dalton McGuinty abruptly announced his resignation on Oct. 15 and in doing so prorogued, or suspended, the Legislature until his successor is named. The minority government will hold a leadership convention on the weekend of Jan. 25-27. McGuinty also said he will not be a candidate for the federal leader of the party.


   Facts and figures:
   Canada’s dollar was worth $1.0016 in U.S. funds on Friday while the U.S. currency returned 99.83 cents Canadian before bank exchange fees.
   The Bank of Canada’s key interest rate is steady at 1 percent while the prime-lending rate is 3 percent.
   Stock markets are lower, with the Toronto exchange index at 12,301 points and the TSX Venture index at 1,298 points on Friday.
   Lotto 6-49: (Oct. 24) 9, 10, 11, 24, 34 and 42; bonus 5. (Oct. 20) 13, 14, 21, 24, 32 and 35; bonus 18. Lotto Max: (Oct. 19) 1, 2, 3, 15, 22, 37 and 41; bonus 6.


   Regional briefs:
   - The funeral was held Friday for Lincoln Alexander of Hamilton, Ontario, a former Conservative member of Canada’s Parliament for four terms and Ontario’s lieutenant-governor. Called a pioneer in racial equality, Alexander, whose family moved to Canada from Jamaica, was the first black man to become a Member of Parliament and a representative of Queen Elizabeth II. He was 90.
   - A new contract ratified by 32,000 British Columbia nurses will allow the reduction of heavy workloads and aid patient care. It provides for the hiring of 2,125 more nurses and the calling in of staff to replace those off sick or on vacation. They also received a wage increase of three percent effective next April 1.
   - An unnamed Toronto couple has bought one of the 11 remaining bottles of Glenfiddich’s Janet Sheed Roberts Reserve scotch. The 55-year-old scotch was auctioned in Toronto for $52,000 to aid WoundedWarriors.ca. It was produced to recognize the granddaughter of distillery founder William Grant.

Jim Fox can be reached at canadareport@hotmail.com

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