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business briefing

These are stories Report on Business is following Thursday, Oct. 30, 2014.

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Loonie to soften
Expect the Canadian dollar to weaken further in the wake of the Federal Reserve's policy statement yesterday.

Further still should tomorrow's report on Canada's economy comes in weaker than expected.

And further still should oil prices decline even more.

Yesterday's decision by the Fed, which opened the door to an earlier-than-expected hike in interest rates, put a spark into the U.S. dollar, thus weakening the Canadian currency, which stands above 89 cents U.S. this morning.

Already, the loonie, as Canada's dollar coin is known, has softened up on lower oil prices, and the suggestion that the Bank of Canada will lag the Fed in hiking rates.

Tomorrow's report from Statistics Canada on how the economy fared in August could well drag the loonie down further, said chief currency strategist Camilla Sutton of Bank of Nova Scotia.

And while crude prices look to have stabilized, a further tumble would weigh on the currency again, she said.

As The Globe and Mail's David Parkinson reports, the Fed yesterday ended its asset-buying stimulus program known as quantitative easing, turning the focus of the markets to when the U.S. central bank will actually hike rates.

U.S. economy better than expected
The U.S. economy is chugging along, albeit at a slower pace.

Gross domestic product expanded in the third quarter at an annual rate of 3.5 per cent, better than expected though slower than the second quarter's blistering 4.6 per cent.

That earlier showing, however, marked a rebound from a particularly harsh winter.

"Going forwards, we expect growth to average around 3 per cent in the coming quarters," said Andrew Grantham of CIBC World Markets.

"While that doesn't seem like much by historical standards, a lower speed-limit on growth now means it will be enough to keep the jobless rate moving down and see the sort of improvement in the labour market that the Fed began to acknowledge in yesterday's statement."

Bombardier profit slumps
Bombardier Inc.'s third-quarter profit fell almost 50 per cent as the plane and train maker took a charge related to previously announced job cuts, but profit on an adjusted basis beat expectations, The Globe and Mail's Bertrand Marotte reports.

Net profit was $74-million or 3 cents per share, compared with $147-million or 8 cents in the year-earlier period.

Revenue was up 20 per cent at $4.9-billion, above analysts' estimates of $4.82-billion.

On an adjusted basis, net profit was $222-million or 12 cents, compared with $165-million or 9 cents. Analysts had been expecting earnings per share of 10 cents in the quarter.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
BNS-N
Bank of Nova Scotia
+1.21%51.78
BNS-T
Bank of Nova Scotia
+0.94%70.07
CADUSD-FX
Canadian Dollar/U.S. Dollar
-0.08%0.73791
CM-N
Canadian Imperial Bank of Commerce
+1.3%50.72
CM-T
Canadian Imperial Bank of Commerce
+1.13%68.67
MFI-T
Maple Leaf Foods
-2.8%22.21
TRI-N
Thomson Reuters Corp
-0.08%155.83
TRI-T
Thomson Reuters Corp
-0.41%210.8

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