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These are stories Report on Business is following Monday, Jan. 26, 2015.

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Shorts on rise
Currency speculators are making out like bandits from the accelerated depreciation of the Canadian dollar.

The net short position against the currency rose last week to $2.4-billion, the heftiest since last May, according to the latest report from the U.S. Commodity Futures Trading Commission.

What's important here is that the report, released Friday, shows the short positions as of last Tuesday, the day before the Bank of Canada sparked a fresh plunge in the Canadian dollar with its surprise rate cut.

Which means those speculators made a killing when the central bank cut its benchmark overnight rate by one-quarter of a percentage point to 0.75 per cent last Wednesday.

The loonie, as Canada's dollar coin is known, has been falling for some time, of course, along with the price of oil.

But last Wednesday's move was extreme. And by the time the week ended, the currency had lost 3.5 per cent.

Interesting, too, will be the next report, which will be released this Friday. Chief currency strategist Camilla Sutton of Bank of Nova Scotia expects it to show the net short position widened even further.

Having said that, the recent rise in the shorts has been modest, Ms. Sutton said. The number has been wider, to the tune of billions more.

Some market players are speculating the Bank of Canada could cut yet again, particularly if oil prices continue to fall.

"For CAD, stability in oil prices is crucial to slow the depreciation, any ongoing weakness in oil will increase expectations for a second BoC interest rate cut (currently the market is pricing in a 50-per-cent chance) and push the currency lower," Ms. Sutton said, referring to the Canadian currency by its symbol.

It's also important to note that Canada's commercial banks have yet to match the central bank rate cut.

"In retrospect, it can be seen as a brilliant plan," Benjamin Tal of CIBC World Markets said of the Bank of Canada surprise.

"Cut the bank rate, get a lift from a weaker dollar, but keep lending rates unchanged so you don't fuel credit growth, in general, and real estate activity, in particular," he added in a recent report.

"But that was not the plan. The Bank fully expected lenders to play along. In fact, if the banks stick to their guns (a big if), the likelihood that the Bank of Canada cuts again is very high."

Many observers, by the way, expect the loonie to slide further still.

In a new forecast released today, for example, Toronto-Dominion Bank projected the loonie will tumble to 75 cents by early next near.

The currency today touched a low point of 80.16 cents, its weakest level of the past year, having touched a high today of 80.57 cents.

Tough times for Alberta
Whether or not Alberta sinks into an official recession this year, it's certainly going to feel that way, a new forecast from Toronto-Dominion Bank suggests.

Today's report projects economic growth in the oil-rich province of just 0.5 per cent in 2015, before a rebound next year to the tune of 1.8 per cent.

Notable will be the hit to income and employment, said the study from TD chief economist Craig Alexander, deputy chief economist Derek Burleton and economist Jonathan Bendiner, which also projects oil will average $47 (U.S.) a barrel this year and $65 in 2016.

It's hard to say whether what happens in the western province will meet the definition of a recession, which is seen as at least two quarters of economic contraction.

That's because Alberta's numbers are annual, rather than quarterly, Mr. Alexander said.

But with 2015 growth of just half a per cent, it's hard to escape at least some quarters of contraction, he said in an interview.

"We can debate whether or not Alberta is going to face a recession this year, but it's certainly going to feel like one to most Albertans," he added.

The dramatic plunge in oil prices since the summer will hit Alberta hard, filtering through the provincial economy, the TD report warned.

"Recently, a slew of downbeat operational plans coming out of the oil patch have pointed to a pullback in hiring and lower capital outlays in the oil sands in 2015," it said.

"Oil production is still on track to expand this year; however, housing activity will be adversely affected by the economic slowdown," it added.

"Weaker employment and income gains are expected to translate into a downturn in the resale market, which is estimated to lead to a pullback in new residential construction activity."

Average home prices in Alberta, the study added, will tumble by 3.5 per cent this year and 1.3 per cent in 2016. Home sales, it said, will plunge almost 21 per cent in 2015 and a further 2.2 per cent next year.

Provincial revenues are also taking a huge hit, but Mr. Alexander stressed the government should not get in a tizzy about that.

As in, don't go overboard where austerity's concerned because that would hurt the economy even more. And Alberta still has an "outstanding" credit rating.

Income will rise again, and the labour market will return to growth, he added.

As for the other oil provinces, TD projected an outright contraction of 1.2 per cent in each of this year and next in Newfoundland and Labrador, while Saskatchewan will see growth of 1.3 per cent and 1.8 per cent.

Newfoundland's economy, of course, is traditionally volatile.

As for the other provinces, Ontario is now projected to lead the country with growth in 2015 and 2016 of 2.8 per cent and 2.5 per cent.

Last week, the Conference Board of Canada warned Alberta could slide into recession this year.

Russia cut to junk
Russia suffered another blow today as Standard & Poor's Ratings Services cut the oil-dependent country to junk.

"The downgrade reflects our view that Russia's monetary policy flexibility has become more limited and its economic growth prospects have weakened," S&P said as it downgraded Russia's foreign currency ratings to double-B-plus from triple-B-minus.

"We also see a heightened risk that external and fiscal buffers will deteriorate due to rising external pressures and increased government supply to the economy.

The country's financial system is "weakening," hampering the central bank, S&P said, also citing the "inflationary effects" of the plunging rule, as well as Western sanctions.

"We also understand that during 2014 the Russian public had been converting rubles into foreign currency, thereby fueling depreciation," it added.

"Given the pass-through of more expensive imports to domestic prices generally, we now expect that inflation will rise above 10 per cent in 2015."

Russia is facing a deep slump in the wake of the collapse in oil prices.

Greece goes anti-austerity
The euro zone is showing little sense of panic in the wake of the anti-austerity election victory, our European bureau chief Eric Reguly reports.

But many, many questions remain after yesterday's win by the leftist Syriza.

Here's what some observers are saying today:

"The rest of Europe won't be laying out a comfy welcome mat. France and Germany have been insisting that Greece must stick to its commitments in return for financial assistance. Germany's initial comments were cautious … there will be co-operation with the new government, but they should stick to the agreed commitments, their position on a Greek debt haircut was still unchanged, and extending the current program for Greece was an option." Jennifer Lee, BMO Nesbitt Burns

"The vote is a mandate for renegotiation on debt and a plea for an end to austerity. It is not, of course, a surprise. The result is in line with opinion polls and the euro has fallen a very long way in recent weeks, in the face of a large and growing short position in the market. No surprise then, that having made a new low in Asia overnight, we have seen a modest bounce in [the euro versus the U.S. dollar]. It isn't a big enough bounce however to answer any questions about how fast the fall in EUR/USD towards parity can be, given the lopsided positioning." Kit Juckes, Société Générale

"Having spent so much time, effort and money trying to keep Greece in the family, the [European Central Bank] will be reluctant to see that all wasted, but any flexibility offered to them could be multiplied tenfold should other nations follow their example. EUR/USD has looked nervous for some time but these latest developments have seen it trade as low as $1.1097 this morning and parity between the euro and the U.S. dollar looks increasingly likely." Alastair McCaig, IG

"Twenty years from now and maybe sooner, we could well look back at this weekend's events in Greece as a seminal event or turning point in how the evolution of the next steps of the crisis in Europe plays out … Maybe what Europe needs right now is for a fringe party to shake up the political status quo and change the terms of the debate because at the moment Europe appears to be on a road to nowhere, and if the election of Alexis Tsipras and Syriza ultimately ends with Greece tumbling out of the euro then EU politicians will have no one else to blame but themselves." Michael Hewson, CMC Markets

"During the last campaign, an exit from the currency union was an ongoing worry, but in these circumstances market participants may be more concerned to watch how the ECB and key member states react to Greek demands for budget flexibility. Several other countries have more substantial debt burdens than Greece (in terms of interest expense as a percentage of GDP, Italy's and Portugal's are higher) and have seen the rise of radical political parties. General elections are expected in Spain by December, and markets may temper reactions to the growth-positive aspects of any new fiscal concessions with concern over the more remote risk of emboldening alternative groups." Jared Woodard, BGC Financial

Uniqlo to open in Canada
Target Corp. may be calling it quits in Canada, but Japan's Uniqlo is about to try to make a go of it.

Uniqlo will open its first Canadian store next year at Toronto's Yorkdale Shopping Centre and the downtown Toronto Eaton Centre.

Mattel names interim CEO
Shares of Mattel Inc. sank today after the toy maker reported its preliminary fourth-quarter results and announced the departure of its chief executive officer.

Mattel, whose iconic Barbie brand has suffered of late, said Bryan Stockton had resigned as CEO, and that Christopher Sinclair would take his place on an interim basis.

"Mattel is an exceptional company with a great future but the board believes that it is the right time for new leadership to maximize its potential," said Mr. Sinclair, who's also the board's independent lead director.

Mattel also posted a fourth-quarter profit of $149.9-million (U.S.), or 44 cents a share, well down from the $369.2-million or $1.07 of a year earlier, though it included a nickel-a-share of integrating Mega Brands.

Global sales tumbled by 6 per cent to $1.99-billion.

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