November 04:
Loonie sinks
The Canadian dollar is at its lowest level in about five years this morning, hit by an oil price war sparked by Saudi Arabia and a “very dovish” Bank of Canada governor.
The Canadian dollar is at its lowest level in about five years this morning, hit by an oil price war sparked by Saudi Arabia and a “very dovish” Bank of Canada governor.
Source: www.theglobeandmail.com/report-on-business/top-business-stories/canadian-dollar-sinks-to-5-year-low-on-oil-price-war-very-dovish-bank-of-canada/article21436799/
The loonie, as Canada’s dollar coin is known, sank below 88 cents U.S. today, touching the lowest level since the summer of 2009, as crude prices tumbled to their lowest in about three years.
“I think what we have is really everything working against the Canadian dollar here,” said chief currency strategist Camilla Sutton of Bank of Nova Scotia.
The loonie, which hit a low point of 87.77 cents at one point today, could falter even more given global and domestic developments.
The collapse in oil prices, spurred on yesterday by Saudi Arabia’s announcement of a cut in prices in the United States, diminishes the economic outlook for Canada, Ms. Sutton explained.
Add to that the fact that there’s no bottom in sight.
Saudi Arabia’s decision to cut U.S. prices and raise Asian prices suggests the oil-producing giant is becoming “more competitive” in the United States, Ms. Sutton said.
As The Globe and Mail’s Shawn McCarthy reports, there are now concerns that the world’s major producers, which, of course, includes the Saudis, want to protect their market share, which could mean even lower prices.
This is rippling through global markets today.
“Oil prices are dropping fast again in European trading after Saudi Arabian Oil Co. stated yesterday that it will cut prices for all oil grades that is sells to the U.S., oil stocks in the U.K. including BP and Shell are trading lower which could see Exxon and Chevron under pressure in the U.S.,” said analyst Jasper Lawler of CMC Markets in London.
Feeding into the erosion of the loonie were yesterday’s comments from Bank of Canada Governor Stephen Poloz, which again suggested interest rates are on hold at rock-bottom levels for some time yet.
Which, of course, means the Canadian central bank will lag its U.S. counterpart, the Federal Reserve, in eventually hiking.
As The Globe and Mail’s David Parkinson writes, Mr. Poloz defended
his low-rate policy, which he said is key to bolstering Canada’s economy in the post-crisis era.
- Shawn McCarthy: Oil sinks in North America on Saudi Arabia's intention to cut prices
- David Parkinson: Bank of Canada still fears low inflation despite balanced outlook
Scotiabank unveils restructuring
Bank of Nova Scotia kicked off its new fiscal year with a restructuring to slash jobs and branches, take additional loan-loss provisions, and
Bank of Nova Scotia kicked off its new fiscal year with a restructuring to slash jobs and branches, take additional loan-loss provisions, and
cost the group $451-million in charges.
The bank, whose fiscal year began Nov. 1, said today it will eliminate 1,500 positions, two-thirds of them in Canada, and close or scale bank 130 branches outside the country.
This will allow Scotiabank to focus on high-growth markets such as Chile and Colombia, The Globe and Mail’s Tim Kiladze reports.
“Today’s announcement is a result of making some difficult but necessary decisions to support our long-term goals,” said chief executive officer Brian Porter.
“We are confident that these initiatives will allow us to continue investing in high-growth areas of the bank,” he added in a statement.
“Notwithstanding these unusual charges, we remain confident that our 2014 reported results will be within our financial objectives for the full year.”
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| SECURITY | PRICE | CHANGE | |
|---|---|---|---|
| BNS-T Bank of Nova Scotia | 68.78 | -0.24 -0.348 % | Add to watchlist |
| YM-FT Dow e-mini | 17,292.00 | -19.00 -0.11 % | Add to watchlist |
| ES-FT S&P 500 e-mini | 2,011.25 | -0.25 -0.012 % | Add to watchlist |
| CADUSD-FX Canadian Dollar/U.S. Dollar | 0.88 | -0.007 -0.834 % | Add to watchlist |
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