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- Aug 22, 2008
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-Canada’s currency may extend its biggest annual decline on record, as tumbling crude prices hobble foreign investment in the country’s oil patch, according to the world’s biggest strategists and economists. -The Canadian dollar fell 18 percent this year as a global recession cut demand for commodities, which generate half the country’s exports. Canada’s current-account surplus, the broadest measure of trade, will turn into deficit in 2009, said Toronto- based Scotia Capital Inc., a unit of Canada’s third-biggest bank.-“A scaling back of foreign direct investment is a negative for the Canadian dollar,” said Eric Lascelles, chief economics strategist in Toronto at TD Securities Inc., a unit of Canada’s second-largest bank. “If there is less investment in oil sands, there will be less production and less exporting down the road,” he said, referring to the world’s biggest energy pool outside Saudi Arabia.
-Deutsche Bank AG of Frankfurt, the world’s biggest currency trader, forecasts the Canadian dollar will weaken to C$1.30 by the end of 2009, while Zurich-based UBS AG, the second-biggest trader, sees it depreciating to C$1.33.
-“Foreign companies will be very unlikely to start new projects unless the price of oil rebounds,” said Dustin Reid, director of currency strategy at RBS Global Banking & Markets in Chicago. “It clearly is not a good signal for the Canadian dollar from a longer-term perspective.”
-Royal Dutch Shell Plc, based in The Hague, and StatoilHydro ASA, Norway’s biggest oil producer, are among companies that deferred or canceled at least 14 projects this year in Alberta’s oil sands. Oil collapsed more than $100 since July to a low of $32.40 a barrel, less than half the price needed to make oil- sands projects economically viable, according to estimates by the Canadian Association of Petroleum Producers.
-Oil-sands projects will be profitable if crude is priced at $95 to $100 a barrel in coming decades, said Ryan Toddhttp://http://search.bloomberg.com/...F-8&filter=p&getfields=wnnis&sort=date:D:S:d1, a Deutsche Bank analyst in New York.
-“Much of the activity in the oil patch was investment, not production,” said David Watthttp://http://search.bloomberg.com/...F-8&filter=p&getfields=wnnis&sort=date:D:S:d1, a senior currency strategist at RBC Capital Markets in Toronto. “That production is set to start in coming years but recent decisions on mothballing put some risk into that conclusion.”
-“A deficit can only mean bad things for the currency,” said Carlos Leitaohttp://http://search.bloomberg.com/...F-8&filter=p&getfields=wnnis&sort=date:D:S:d1 at Montreal-based Laurentian Bank Securities, who was ranked second among the world’s most accurate economists in a survey by Bloomberg News last month. “If oil remains in this range of $40 or even less, the Canadian dollar won’t be going up.”
http://www.bloomberg.com/apps/news?pid=206...mp;refer=canada
-Deutsche Bank AG of Frankfurt, the world’s biggest currency trader, forecasts the Canadian dollar will weaken to C$1.30 by the end of 2009, while Zurich-based UBS AG, the second-biggest trader, sees it depreciating to C$1.33.
-“Foreign companies will be very unlikely to start new projects unless the price of oil rebounds,” said Dustin Reid, director of currency strategy at RBS Global Banking & Markets in Chicago. “It clearly is not a good signal for the Canadian dollar from a longer-term perspective.”
-Royal Dutch Shell Plc, based in The Hague, and StatoilHydro ASA, Norway’s biggest oil producer, are among companies that deferred or canceled at least 14 projects this year in Alberta’s oil sands. Oil collapsed more than $100 since July to a low of $32.40 a barrel, less than half the price needed to make oil- sands projects economically viable, according to estimates by the Canadian Association of Petroleum Producers.
-Oil-sands projects will be profitable if crude is priced at $95 to $100 a barrel in coming decades, said Ryan Toddhttp://http://search.bloomberg.com/...F-8&filter=p&getfields=wnnis&sort=date:D:S:d1, a Deutsche Bank analyst in New York.
-“Much of the activity in the oil patch was investment, not production,” said David Watthttp://http://search.bloomberg.com/...F-8&filter=p&getfields=wnnis&sort=date:D:S:d1, a senior currency strategist at RBC Capital Markets in Toronto. “That production is set to start in coming years but recent decisions on mothballing put some risk into that conclusion.”
-“A deficit can only mean bad things for the currency,” said Carlos Leitaohttp://http://search.bloomberg.com/...F-8&filter=p&getfields=wnnis&sort=date:D:S:d1 at Montreal-based Laurentian Bank Securities, who was ranked second among the world’s most accurate economists in a survey by Bloomberg News last month. “If oil remains in this range of $40 or even less, the Canadian dollar won’t be going up.”
http://www.bloomberg.com/apps/news?pid=206...mp;refer=canada
