These are stories Report on Business is following Monday, Oct. 6, 2014.
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Loonie climbs
The Canadian dollar jumped by about a penny today as the rally in the U.S. greenback ran out of steam, hitting the 90-cent range again.
That followed the drop in the loonie, as Canada's dollar coin is known, on Friday, when it sank on a combination of strong U.S. economic news and a week Canadian trade report.
Other factors were at play today, but the softer U.S. dollar was largely behind the stronger Canadian dollar, said chief currency strategist Camilla Sutton of Bank of Nova Scotia.
The currency, which was as low as 88.77 cents U.S. today, climbed to reach 89.99 cents at one point, though was just shy of that by late in the day.
These "increasingly volatile times," as Ms. Sutton put it, can be a headache for some.
"It changes the way that people have to manage their foreign currency risk. It has to be much more thoughtful and strategic," she said.
These are interesting times in the currency market, to say the least.
On Friday, for example, the latest report from the U.S. Commodity Futures Trading Commission showed speculators have soured on the loonie again amid its weakening trade of late.
The CFTC report showed the long-short balance shifted last week to a net short position in the currency of $408-million (U.S.).
That balance had been deep in the red for some time, but then moved in the first week of July. For the first time since then, according to the CFTC, it's back in the negative.
The Canadian dollar had been softening for a variety of reasons, notably what had been a strong rally for the U.S. greenback, jitters over China that can hurt commodity-linked currencies, and the suggestion that the Bank of Canada will be late to the game in raising interest rates for the first time, and, in particular, lagging the Federal Reserve.
As The Globe and Mail's David Parkinson reports, that gathered steam on Friday, knocking the Canadian dollar for a loop, amid strong jobs data in the United States and a troubling trade report in Canada.
The loonie, as Canada's dollar coin is known, lost more than 4.5 per cent in the third quarter of the year.
"The BoC's tone remains conflicted, with near-target inflation limiting the ability to provide an accommodative tone and forcing a shift to focus on the potential for BoC-Fed policy divergence," Ms. Sutton said in a report on how the loonie performed in the last quarter.
"Globally, the broad-based USD rally has coincided with rising concern over China's growth outlook, delivering a strong headwind to growth-sensitive commodity currencies alongside a rise in global measures," she added.
"Finally, measures of CAD sentiment shifted throughout the quarter as support provided by CFTC positioning and options prices slowly eroded," Ms. Sutton said, referring to the currency by its symbol.
Foreign exchange strategist Kevin Hebner of JPMorgan Chase and Co. also noted how plunging oil prices have played into the fate of the Canadian dollar, though he, too, sees the biggest factor behind his "bearish" view as the expected timeline of rate hikes.
The CFTC's weekly reports are released on Fridays, based on information from the previous Tuesday. So by the time Monday rolls around, they're almost a week out of date.
- Video: The Canadian dollar could tumble to 83 cents next year
- David Parkinson: Canada plunges to unexpected trade deficit
- Welcome to an 89-cent Canadian dollar
- Central banks stock up on Canadian dollars (Take that, mate)
Postmedia buys Suns, other properties
Two of Canada's big media companies are rewriting the map with the sale today of 175 English-language papers and digital properties.
Postmedia Network Canada Corp. is buying the properties from Quebecor Media Inc. for $316-million, less a $10-million adjustment largely tied to real estate, The Globe and Mail's James Bradshaw reports.
Included in the sale is the tabloid Sun group, with publications in Toronto, Ottawa, Calgary, Edmonton and Winnipeg, the London Free Press and two daily freebies in Toronto and Vancouver.
"This investment by Postmedia is a strong endorsement of the future of the Canadian newspaper industry and made-in-Canada journalism," said Postmedia chairman Rod Phillips.
Today's deal puts the Sun group and the other properties in the same hands that own several major publications across Canada.
Canada's antitrust watchdog, commissioner John Pecman, said the Competition Bureau will review the deal.
"While media ownership concentration can raise other public interest concerns, under the Competition Act, the Bureau's mandate is to review mergers exclusively to determine whether they are likely to result in a substantial lessening or prevention of competition."
- James Bradshaw: Quebecor sells English papers to Postmedia for $316-million
- Christine Dobby: Quebecor frees up flexibility for potential wireless push, analysts say
- Ian McGugan: Postmedia backers bet there's still money in newspapers
- David Parkinson in ROB Insight (for subscribers): Postmedia deal will force regulator to rethink mandate
- Boyd Erman in Streetwise (for subscribers): For GoldenTree, multiple angles to Postmedia bet
- James Bradshaw: Five things to know about the Postmedia-Quebecor deal
Petronas warns
The chief executive officer of Malaysia's Petronas warns that unless tax and regulatory issues are resolved by Oct. 31 for its B.C. liquefied natural gas project, the joint venture will be delayed by up to 15 years.
"The proposed fiscal package and regulatory pace in Canada threatens the global competitiveness" for the Petronas-led Pacific NorthWest LNG project, Shamsul Azhar Abbas said in a statement today, The Globe and Mail's Brent Jang reports.
Last month, Pacific NorthWest LNG requested and received an extra 45 days to submit additional information to environmental regulators. The regulatory review is now slated to be completed by Nov. 5 and an environmental assessment certificate could be issued by Dec. 20 – only 11 days before Pacific NorthWest LNG's self-imposed deadline to make a final investment decision.
"In order to remain competitive, Petronas needs to secure consensus on key principles vital to the success of this project by the end of October," he said. "Missing this date will have the impact of having to defer our investments until the next LNG marketing window, anticipated in 10-15 years."
HP to split
Shares of Hewlett-Packard Co. climbed today as the company unveiled plans to break into two.
The computer company announced the details today, though the shares were already rising on reports that the split would occur.
One company, HP Inc., will hold the PC and printer operations, while the other, Hewlett-Packard Enterprise, will run the software and services businesses.
"Our work during the past three years has significantly strengthened our core businesses to the point where we can more aggressively go after the opportunities created by a rapidly changing market," said chief executive officer Meg Whitman, who will lead the new HP Enterprise while chairing the HP Inc. board.
"The decision to separate into two market-leading companies underscores our commitment to the turnaround plan."
Chevron sells stake
Chevron Corp. is bringing a partner on board to help develop its Duvernay shale gas assets in Alberta.
Its Canadian subsidiary is selling a 30-per-cent stake in the play to state-owned Kuwait Foreign Petroleum Exploration Co. for $1.5-billion (U.S.), The Globe and Mail's Bertrand Marotte reports.
Chevron Canada will continue to operate the play, with its 70-per-cent stake, the company said.
To date, Chevron has drilled 16 wells since starting the exploration program, with initial production rates of up to 7.5 million cubic feet of natural gas and 1,300 barrels of condensate daily, it said.
"This sale demonstrates our focus on strategically managing our portfolio to maximize the value of our global upstream businesses and is consistent with our partnership strategy," said Chevron Corp. senior vice-president Jay Johnson.
- Bertrand Marotte: Chevron Canada sells Duvernay shale stake for $1.-billion
- Brent Jang: Petronas moves to change B.C. LNG plan for environmental approval
Streetwise (for subscribers)
Real estate
ROB Insight (for subscribers)
Business ticker
- Lundin Mining to buy Freeport-McMoRan mine
- Hilton to sell iconic Waldorf Astoria hotel in New York
- Walt Disney rescues Euro Disney with $1.3-billion funding deal
- Air Canada reaches tentative deal with pilots for new 10-year contract
- Canada one of the world's most popular destinations for job seekers: study