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These are stories Report on Business is following Wednesday, March 18, 2015.

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Dollar climbs
The Federal Reserve sent the Canadian dollar surging today as it signalled a no-longer-patient but still-slow road ahead.

The loonie shot up after the U.S. central bank's latest missive, in which it dropped the word "patient," which signals a rate hike, though no earlier than in June.

The Canadian dollar was as low as 77.93 cents U.S. today, but soared to as high as 79.67 cents after central bank members changed their rate projections, warning, too, of softer export growth.

It hovered around 79.76 cents U.S. after markets closed on Wednesday.

"While the key word 'patience' was removed, the dot plot suggests the consensus on hikes from Fed members has drifted farther and lower," said senior currency strategist Greg Moore of RBC Dominion Securities.

"The median forecast for the Fed funds rate is now 0.625 per cent in 2015, from 1.125 per cent at the December meeting," he said of the outlook for the benchmark rate.

"That has seen massive USD selling across the board, including against CAD."

He was referring to the U.S. and Canadian currencies by their symbols.

Over all, the Fed's policy-setting group, the Federal Open Market Committee, said economic growth has "moderated somewhat," but it cited "strong job gains and a lower unemployment rate," The Globe and Mail's Luke Kawa writes.

What's this mean for the actual rate cycle?

"If employment figures remain strong and growth and wages pick up as we anticipate, a first hike in June remains on the table," said Andrew Grantham of CIBC World Markets.

"Regarding the general economic outlook, the FOMC stated that growth had 'moderated somewhat' and specifically mentioned a slowing in export growth. So clearly they will be looking for an improvement in the growth outlook as well before hiking."

Up until now, the Fed had said it would be "patient" in hiking its benchmark rate from effectively zero. It changed that language today, though said a rate hike at the next meeting, in April, is "unlikely."

"The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labour market and is reasonably confident that inflation will move back to its 2-per-cent objective over the medium term," it said.

"The change in the forward guidance does not indicate that the committee has decided on the timing of the initial increase in the target range."

All in all, today's outing was a "classic good-cop-bad-cop" situation, said deputy chief economist Michael Gregory of BMO Nesbitt Burns.

"On the bad side, the Fed, in dropping 'patient,'  has a stated predilection to raise rates," he said.

"On the good side, the tightening criterion is tied to being 'reasonably confident' that inflation will head back to target, meaning wage and core inflation readings on the ground matter most," Mr. Gregory added in a research note.

"With lots of wage-dampening slack lingering in the labour market and the double-whammy of a strong U.S dollar and weak oil prices propagating core disinflation pressures, we might ourselves have to be patient before we see the inevitable lift-off of Fed policy rates."

Riksbank cuts again
Sweden's central bank, meanwhile, surprised the markets with another rate cut today, moving deeper into negative territory.

Not only did the Riksbank take its key rate to -0.25 per cent, it also unveiled a $3.5-billion (U.S.) spending spree for government bonds.

"There are signs that inflation has bottomed out and is beginning to rise, but the recent appreciation of the krona risks breaking this trend," the central bank said.

"These measures and the readiness to do more at short notice underline that the Riksbank is safeguarding the role of the inflation target as a nominal anchor for price setting and wage formation," it added.

The Riksbank last cut rates about a month ago.

"In the tit-for-tat round of monetary easing of recent months no central bank has been as explicit as the Riksbank in acknowledging that rate cuts and [quantitative easing] are motivated solely by and directed at the exchange rate," said Paul Meggyesi of JPMorgan Chase & Co.

'Decisive action' from GM
General Motors Co. is pulling back in Russia, closing a plant and taking out the Opel brand by the end of the year.

"This decision avoids significant investment into a market that has very challenging long-term prospects," president Dan Ammann said of Russia, which, hurt by Western sanctions and the collapse in oil prices and rubble, is believed headed for a recession.

GM said it would close its St. Petersburg plant in the middle of this year, quit the Opel brand by December, and kill the contracted assembly of Chevrolet models.

GM said it will focus its attention on the "premium segment" of the market, with Cadillacs and U.S.-made Corvettes, Camaros and Tahoes.

"We had to take decisive action in Russia to protect our business," Karl-Thomas Neumann, the chief of the Opel group, said in a statement.

GM said it expects a hit of some $600-million (U.S.) in the first quarter.

"With low expectations from the Russian market's growth prospects this seems a sensible move and with prices still just 7.7-per-cent off the multiyear highs of late 2013, it seems investors believe the business will do well enough off the likes of its premium Cadillac and Chevrolet brands to make up for the loss of Opel," said market analyst Joshua Mahony of IG in London.

Double-double
Starbucks Corp. today unveiled a two-for-one stock split, the sixth for the coffee chain since it went public in 1992.

"Adjusting for the stock split effectively has the impact of modestly increasing our earnings guidance for the second quarter and for fiscal 2015," said chief financial officer Scott Maw.

Adjusting for the split, Starbucks is forecasting earnings per share of 32 cents (U.S.) for the second quarter, and $1.77 to $1.79 for the year.

A grande gesture.

Conoco cuts jobs
ConocoPhillips is cutting 7 per cent of its Canadian staff, joining a quickly expanding list of energy companies slashing their work forces to cope with the collapse in oil prices, The Globe and Mail's Jeffrey Jones reports.

ConocoPhillips Canada, a unit of the Houston-based oil major, said the layoffs number about 200 in total.

The cuts follow sizable staff reductions announced yesterday by Nexen, which is now controlled China's CNOOC Ltd., and Talisman Energy, which is in the process of being taken over by Repsol SA of Spain.

Lara's Theme
One wonders whether Mario Draghi ever saw that famous, and vibrant, scene in 1965's Doctor Zhivago where the upper crust is inside a fancy eatery as revolution brews.

The European Central Bank chief got a taste of something similar today at a ceremony marking the opening of the ECB's new Frankfurt offices, a $1.4-billion (U.S.) edifice.

Demonstrators who were protesting austerity measures set cars on fire and clashed with authorities, who responded with water cannons, according to reports from the scene.

"European unity is being strained," Mr. Draghi said, according to Bloomberg.

"The ECB has become a focal point for those frustrated with this situation. This may not be a fair charge - our action has been aimed precisely at cushioning the shocks suffered by the economy - but as the central bank of the whole euro area, we must listen very carefully."

Unemployment in the 19-nation euro zone stands at 11.2 per cent, with more than 18 million people searching for work.

(For the record, Rod Steiger's Komarovsky is served Foie de veau Gascogne in the film, and Julie Christie's Lara gets jambon farci en croute, according to IMDb.)

OECD paints bleaker picture
Smacked by the oil crash, Canada has taken a big hit in a new OECD economic forecast.

In its updated projections released today, the Organization for Economic Co-operation and Development cut its outlook for growth in Canada this year to 2.2 per cent, down from 2.6 per cent in its November forecast.

For 2016, the group now sees growth of 2.1 per cent, down from 2.4 per cent.

"Oil and commodity exporters are facing weaker growth prospects as the result of lower prices," the OECD said.

The collapse in crude prices will help other countries, however.

Wednesday's report is the latest in a string of forecasts that underscore the hit to Canada, particularly Alberta, from the rout in the oil market. Already, companies in the oil patch have slashed their budgets and cut jobs.

Among the G7, no other country will be affected to the same extent.

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