Loonie jumps amid weaker greenback, expectations of rate hike
TORONTO — The Canadian dollar closed sharply higher Tuesday as the Bank of Canada announced it will leave its key interest rate unchanged at one per cent but also signalled that rate hikes are on the way.
The dollar was up nine-tenths of a US cent to 103.24 cents US.
The loonie had registered a solid advance prior to the Bank of Canada announcement as the U.S. dollar weakened.
But the currency gained momentum after the bank said that “some of the considerable monetary policy stimulus currently in place will be eventually withdrawn.” Analysts said the currency markets didn’t expect such a signal, partly because of signs of a weakening economy. “I think the expectation was that it would be dovish and what it turned out to be was neutral to slightly hawkish in that they changed the wording — so they now say that at some point rates will move higher, where previous to that they had just referenced there was considerable stimulus in the system,” said Camilla Sutton, chief currency strategist at Scotia Capital.
Indigo reports $11.7M loss
TORONTO — Indigo Books and Music Inc. (TSX:IDG) reported a loss in its latest quarter, reversing a profit from a year ago as the company worked to promote its Kobo eReader.
The retailer said Tuesday it lost $11.7 million or 47 cents a diluted share for the quarter ended April 2. That compared with a profit of $497,000 or two cents a year earlier.
Revenue in the quarter — which was one week shorter than in 2010 — totalled $210.6 million, down from $228.2 million. The company said quarterly revenue fell one per cent, on a normalized 13-week basis. For its full financial year, Indigo said it earned $11.3 million or 45 cent per diluted share on $1.02 billion in revenue. That compared with a profit of $34.9 million or $1.39 per diluted share on $968.9 million in revenue the previous year.