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These are stories Report on Business is following  Tuesday, Feb. 19, 2013.

Follow Michael Babad and the Globe's top business stories on Twitter.

Currency war?
The International Monetary Fund says there isn't a global currency war, and the G20 says there won't be one.

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But, says David Rosenberg, "indeed" there is.

The chief economist of Gluskin Sheff + Associates was referring to the weekend meeting of G20 finance officials in Moscow, which he deemed to be useless, as well as other recent developments."

"The G20 meeting was predictably a waste of time and ended up doing little to quash concerns over emerging currency wars," Mr. Rosenberg said today.

"The yen and even sterling took their cues from the 'nude nudge, wink wink' approach to foreign exchange manipulations."

Remember that last week, the G7 pledged no competitive devaluations of currencies, though it signalled its acceptance of weaker currencies that come as a result of measures aimed at bolstering economies. Which means government can't target their exchange rates, though their currencies may weaken via other moves, such as asset-buying programs.

"We reiterate that excess volatility of financial flows and disorderly movements in exchange rates have adverse implications for economic and financial stability," G20 finance ministers and central bankers then said in their weekend statement.

"We will refrain from competitive devaluation. We will not target our exchange rates for competitive purposes, will resist all forms of protectionism and keep our markets open."

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IMF chief Christine Lagarde was then asked about this several times in a news conference, to the point, seemingly, of exasperation:

"Zero currency war. Okay? That's very simple. I have to say it again and I'll be happy to repeat it as often as necessary."

There was much discussion of currencies in Moscow, she said, and worries. But no war.

Methinks she doth protest too much?

Mr. Rosenberg would appear to think so:

Britain, he said, is "doing its utmost to weaken the pound (and its inflation mandate) and the expense of the rest of Europe." The pound, he noted, is at a seven-month low amid the Bank of England's higher tolerance of inflation.

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As for Japan, it is "purposefully weakening the yen at the expense of the rest of Asia (but the G20 decided that it is best to avoid addressing this." The currency has dropped by 20 per in just over half a year, he noted.

Investors eye pound
Fresh off having made a killing on the yen, major hedge funds believe the British pound will be the next currency to weaken substantially when Mark Carney takes over as governor of the Bank of England, The Financial Times reports.

It's not that Mr. Carney would target the pound, but his policies are seen as ones that could weaken the currency as a by-product of moves to bolster the U.K. economy.

"Most expect that his policies will also help sterling weaken," chief currency strategist Camilla Sutton told The Globe and Mail. "But he won't target the exchange rate."

According to The Financial Times, major hedge funds such as Soros Fund Management, Tudor Investment Corp. and Caxton Associates, are watching the pound closely, particularly given that Mr. Carney will soon leave his current post as Bank of Canada governor to take over at the British central bank.

The Bank of England has already chosen to "tolerate" higher inflation, as Ms. Sutton put it, and Mr. Carney is known to favour this, as well, moreso than the current governor, Mervyn King. The pound is already weaker.

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"[Hedge funds] are now looking very closely at what they can do with sterling," Rob Kaplan, chief investment officer of Permal, which invests in hedge funds, told The Financial Times.

"With Carney coming in, there are interesting opportunities [either] shorting sterling or going long volatility on sterling."

This is along the lines of what some funds did in shorting the yen as the Bank of Japan, under pressure from the government, recently hiked its inflation target in a bid to help the country out of its slump.

Alberta deficit swells
Alberta is expected to run a deficit of up to $4-billion, outpacing its latest estimate, restated two months ago, by $1-billion, The Globe and Mail's Carrie Tait reports.

The government said it is on track to post a deficit between $3.5-billion and $4-billion, with the shortfall largely owing to weaker-than-expected resource royalties.

Resource revenue for the first nine months of the fiscal year was $2.4-billion lower than expected. Its overall revenue shortfall hit $763-million.

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Great-West in Irish deal
Canada's Great-West Lifeco Inc. has struck a $1.75-billion deal with the Irish government for the country's biggest life, pensions and investment manager, The Globe and Mail's Bertrand Marotte reports.

Great-West, part of the Demsmarais family's Power Financial Corp., is doing doing the deal for Irish Life Group Ltd. through its Canada Life Ltd. unit.

Irish Life has about $50-billion of assets under management and more than 1 million customers.

"This transaction affirms our long-term commitment to Ireland, where Canada Life has operated since 1903," said Great-West CEO Allen Loney. "The acquisition of Irish Life is transformational for our companies in Ireland. It allows us to achieve - with a single transaction - the leading position in life insurance, pensions and investment management, and is consistent with Great-West Lifeco's global business strategy of developing significant market positions in the sectors where the company participates."

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