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business briefing

These are stories Report on Business is following Friday, Sept. 12, 2014.

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Loonie dips
If you think this week has been bad for the Canadian dollar, just wait.

Next week is shaping up to be an exceptionally volatile period for the world's major currencies, said chief currency strategist Camilla Sutton of Bank of Nova Scotia, noting the highly-anticipated meeting of the Federal Reserve, the Scottish independence vote, and inflation readings from several countries.

Scotland's referendum will affect the British pound, of course, but the Fed meeting holds the promise of buffeting the loonie, as Canada's dollar coin is known.

There's a growing expectation that next week's statement from the U.S. central bank could signal the first move toward a more "hawkish" stance, Ms. Sutton said.

What that means is that Fed Chair Janet Yellen and her colleagues could change their language to suggest that the next move in interest rates will depend on economic signals, rather than simply saying they'll remain at rock bottom for a considerable period of time.

In turn, this could push up the already-rising U.S. dollar, in turn pressuring the Canadian currency even more. It could also go the other way, of course, but that's not what's expected at this point.

As Ms. Sutton noted, markets are now in a period of "broad U.S. dollar strength," with concern over commodity-linked currencies like the loonie hurt by a sagging outlook for the global economy.

The Canadian dollar, which lost almost a penny yesterday, dipped further today, hitting a low of 90.2 cents U.S.

Wealth hits record
Canadians are richer than ever, if still deep in debt.

Net worth among Canadian families climbed by $183-billion in the second quarter of the year, driven by real estate and marking a fresh record of $8.1-trillion, according to Statistics Canada today. On a per-capita basis, net worth among Canadian households now stands at $227,000.

"The gain builds on the 2.5-per-cent ($194-billion) increase seen in the previous quarter and pushes the aggregate wealth of Canadian households to its highest level on record," said economist Laura Cooper of Royal Bank of Canada.

But as The Globe and Mail's David Parkinson reports, the key measure of debt to disposable income also rose, to 163.6 per cent, though still shy of the 2013 peak of 164.1 per cent.

"Canadian household debt ratios rose in the second quarter of 2014, which will no doubt spark concerned headlines, but the overall picture continues to improve as we move further from the Great Recession," said senior economist Benjamin Reitzes of BMO Nesbitt Burns.

HBC loss shrinks
Hudson's Bay Co., now not just a Canadian icon but also the owner of Saks, narrowed its second-quarter loss and posted sharply higher sales levels on that acquisition.

HBC said today its loss for the three-month period narrowed to $36-million, or 23 cents a share, diluted, from $81-million or 68 cents a year earlier.

Sales climbed to almost $1.8-billion from $948-million, The Globe and Mail's Marina Strauss reports.

"We continue to execute on the five core strategies of our long-range plan to grow our sales and expand our EBITDA margin - driving digital sales across all our banners, growing Saks OFF 5TH, bringing Saks Fifth Avenue and OFF 5TH to Canada, driving outsized growth at our top doors and driving synergies and efficiencies across our business," said chief executive officer Richard Baker, referring to both the main Saks chain and the OFF 5th chain.

"In the second quarter, we made important progress on each of these strategies, including continued strength from digital sales."

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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 27/03/24 4:00pm EDT.

SymbolName% changeLast
BNS-N
Bank of Nova Scotia
+1.51%51.16
BNS-T
Bank of Nova Scotia
+1.4%69.42
CADUSD-FX
Canadian Dollar/U.S. Dollar
-0.16%0.73587
RY-N
Royal Bank of Canada
+1.26%100.4
RY-T
Royal Bank of Canada
+1.12%136.23

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