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Tuesday, March 24, 2015

Big boost for Canadian dollar over U.S. interest rate statement



   Canada column for Sunday, March 22/15

   THE CANADIAN REPORT
   (c) By Jim Fox

   Canada’s dollar got a big lift from signals the U.S. Federal Reserve isn’t in a hurry to increase interest rates.
   The announcement caused the U.S. dollar to weaken and boosted Canada’s currency to almost 80 cents U.S. after dipping to the 77-cent range, a six-year low.
   Also battering the dollar – that makes it more expensive for “snowbirds” and travel to the U.S. – are slumping oil prices as Canada is a major crude producer and exporter.
   Just in time for the spring house-buying season, the Bank of Montreal has cut its five-year, fixed-mortgage rate to 2.79 percent from 2.99 per cent.
   It’s the lowest-ever rate by one of the big banks but there are concerns about Canadians added to their growing debt load and overheated housing markets in Toronto and Vancouver.
   The average price of a detached house has risen to $1 million in Toronto while it’s $825,000 in Vancouver.

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   Canada wants to “extend and expand” its participation in the war against the Islamic State, Prime Minister Stephen Harper said.
   The Conservative government’s plan to move forward will come before Parliament in the next week.
   It’s believed the extension would involve a commitment of more than six months, taking it through the fall election campaign.
   Parliament last fall approved Canada’s participation in U.S.-led coalition airstrikes in Iraq and the Levant.
   Canada has six CF-18 jets bombing Islamic State targets along with two surveillance planes and an aerial tanker operating out of Kuwait.

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   News in brief:
   - Liberal Leader Justin Trudeau plans to expel Scott Andrews and Massimo Pacetti from the party’s caucus over sexual misconduct allegations. Andrews said he will become an independent Member of Parliament while Pacetti plans not to seek reelection in October. The move follows an independent investigation into complaints by two female New Democrat Members of Parliament.
   - Governor-General David Johnston’s term of office as the representative of Queen Elizabeth II in Canada, has been extended to 2017 by Prime Minister Harper. Johnston, 73, was appointed to the vice-regal post in 2010 for five years. The extension will allow him to take part in events marking the country’s 150th birthday in two years. The lawyer, academic and former university administrator has made “remarkable contributions to Canada in his role,” Harper said.
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   Facts and figures:
   Canada’s dollar is higher at 79.55 cents U.S. while the U.S. dollar returns $1.2569 in Canadian funds, before bank exchange fees.
   The Bank of Canada’s key interest rate is steady at 0.75 percent while the prime-lending rate is 2.85 percent.
   Stock markets are higher, with the Toronto exchange index at 14,975 points and the TSX Venture index 669 points.
   The average price of a liter of gasoline in Canada is down to $1.0490 or $3.96 (Canadian) for a U.S. gallon.
   Lotto 6/49: (March 18) 16, 17, 37, 39, 41 and 45; bonus 14. (March 14) 9, 19, 38, 40, 45 and 47; bonus 13. Lotto Max: (March 13) 2, 8, 10, 15, 17, 20 and 24; bonus 14.

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   Regional briefs:
   - Colder temperatures have resulted in more snow than usual for Canada’s Atlantic provinces, instead of the usual mix with rain. Another storm added 20 inches in Halifax while snow combined with high winds hit New Brunswick and Prince Edward Island. In Ontario, snowsqualls closed the eastbound lanes of Highway 401 near Trenton for a day after a massive pileup of 50 trucks and cars. Four people were injured.
   - More Canadians than usual were able to see nature’s spectacle of Northern Lights. Scientists said a recent disturbance in the Earth’s geomagnetic field pushed the Aurora Borealis more southerly. This resulted in the shimmering belts of hues crossing over areas including Vancouver and Toronto.
   - The last package of Frosted Flakes cereal made in London, Ontario is to be loaned to the museum in that city by Stephane Gaudette of Timmins. He opened the box to find the inner bag signed by three Kellogg’s workers . The company closed the London plant in December after 107 years, putting 500 people out of work as production shifted to the U.S. Gaudette, a history teacher, said it’s an important symbol for the city to keep.

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Jim Fox can be reached at canadareport@hotmail.com

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