Bank expects loonie to lose a little of its luster

Canada's colorful currency is slowly edging back to parity with the U.S. greenback but is expected to lose some luster later this year.

The Royal Bank predicts the dollar will drop to an average of 90.9 U.S. cents by the end of the year and dip to 87 cents U.S. by the end of 2009.

The dollar's depreciating trend will be due to a U.S. recovery in the second half of this year and a strengthening of the U.S. dollar with the end of interest-rate cuts, the bank report said.

Canada's economy will outperform that of its southern neighbor because of continued strong world demand for commodites such as oil, minerals and grains.

But the current U.S. slump is dragging down Canadian exports and the manufacturing sector as the jobless rate rose by 0.2 percent to 6 percent in March.

During the month, the export-oriented economies of Ontario and Quebec lost a total of 47,000 full-time jobs.

Royal Bank economist Paul Ferley said the two previous months had big gains of 89,000 jobs, so the economy was due for more moderate increases.

A more optimistic view of the dollar comes from the Bank of Montreal, anticipating it to end this year at 97 U.S. cents and next year at 95 U.S. cents.

Search still on for missing seal hunter

The search continues for a seal hunter missing after a trawler capsized last weekend near Cape Breton, Nova Scotia.

Carl Aucoin remains missing while the bodies of three other hunters, Bruno Bourque, Gilles Leblanc and Marc-Andre Deraspe of Iles-de-la-Madeleine, Quebec, were recovered.

Their boat, L'Acadien II, struck a large chunk of ice, capsized and sank as it was being towed by an icebreaker to the area of the hunt.

Two other sealers, Claude Deraspe and Bourque's son, Bruno-Pierre, survived.

In another incident, seven seal hunters abandoned their vessel, the Annie Marie, as it sank in icy waters in the same area. They were rescued from an ice floe by a navy helicopter.

News in brief

• Gasoline prices are back at their highest level in three years, reaching $1.12 a liter ($4.25 for a U.S. gallon) in Toronto. Industry watcher Dan McTeague, a Liberal member of Parliament, said the higher prices across Canada don't indicate a trend but are "an artificial bump caused by market speculation, not demand."

• Montreal hockey great Guy Lafleur is suing Montreal police and Quebec's solicitor general for $3.5-million over a warrant issued for his arrest. Attorney Jean-Pierre Rancourt said La­fleur's reputation has been tarnished by authorities deciding to proceed with a public warrant instead of a summons. The incident involves Lafleur's testimony at his son Mark's bail hearing about a court-ordered curfew.

Facts and figures

Canada's dollar advanced to 99.21 cents U.S. on Friday while the U.S. greenback returned $1.0080 Canadian, before bank exchanges fees.

The Bank of Canada's key interest rate is steady at 4 percent while the prime lending rate is 5.75 percent.

Canadian stock markets moved higher during the past week with the Toronto Exchange index rising to 13,668 points while the TSX Venture Exchange was 2,526 points on Friday.

Lotto 6-49: (Wednesday) 2, 5, 8, 20, 21, 33; bonus 11. (March 29) 4, 7, 10, 12, 26, 33; bonus 24. Super 7: (March 28) 9, 11, 25, 31, 34, 38, 42; bonus 28.

Regional briefs

• The Manitoba government is considering following the lead of three eastern provinces in banning hand-held cell phone use while driving. Quebec and Nova Scotia are preparing to pass bills enacting the bans, similar to a law in Newfoundland and Labrador put in place for safety reasons.

• Many people are mourning the impending loss of Vancouver's oldest and most photographed tree. City officials have decided to cut down the giant red cedar that has stood for more than 1,000 years in Stanley Park. A memorial will be put in place of the hollow tree, which was damaged by severe storms two years ago.

• A photo of a man with a camera standing naked in a pothole has led to the Saskatchewan government deciding to repair Highway 32 between Swift Current and Leader. Gord Stueck, who owns a pharmacy in Leader, headed an effort with 11 other people to pose for a calendar to draw attention to the state of their crumbling road. A long camera lens was used to take his not-too-revealing photo in the buff.

Jim Fox can be reached at

canadareport@hotmail.com.

Bank expects loonie to lose a little of its luster 04/05/08 [Last modified: Thursday, October 28, 2010 10:24am]

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