Currency exchange rates are intrinsically linked to the global economy. That’s why every week at theCurrent we bring you the world’s biggest business stories. This week: a strong end to the week for oil prices, the TSX and the Canadian dollar and the Panama papers dominated the global headlines, with a connection to global leaders, and a Canadian connection.
Canada’s economy surpassed all expectations with 41,000 jobs added last month. Employment declined in Prince Edward Island, but remained either unchanged or grew in 10 other provinces. Alberta, which has been hit hard by low oil prices added 19,000 jobs bringing the province’s employment rate in line with the rest of the country. Canada’s unemployment rate overall fell 0.2% to 7.1%. Most of the jobs were permanent rather than part-time or temporary positions. (Source: http://www.statcan.gc.ca/daily-quotidien/160408/dq160408a-eng.htm)
Bolstered by promising employment news the Canadian dollar rallied to above 77 cents US on Friday. Crude oil prices rose $2.48 to $39.74 contributing to the loonie’s 1.05 cent rise to 77.13 cents US. The TSX also rose by 1% thanks to a strong performance by the mining metals and energy sector. (Source: http://www.ctvnews.ca/business/canadian-dollar-jumps-stock-markets-surge-friday-morning-1.2850809)
A huge leak of information from a Panamanian law firm, Mossack Fonseca, has exploded into a global scandal. More than 11 million documents list offshore accounts owned by some of the world’s wealthiest people, in order to avoid paying domestic taxes. The Panama papers, as they are now called, reveal how the global 1% use secretive banking techniques to hide their wealth in tax havens like Panama. (Source: http://www.theguardian.com/news/2016/apr/03/what-you-need-to-know-about-the-panama-papers)
The Panama papers dominated global headlines and sucked in more and more of the world’s elite. Russian oligarchs, celebrities like Simon Cowell, global leaders from Pakistan, Iraq, and British Prime Minister David Cameron’s father have all been linked to offshore accounts. Iceland’s Prime Minister Sigmundur Davíð Gunnlaugsson was also caught up in the scandal and has since resigned. (Source: http://www.theguardian.com/news/2016/apr/03/what-you-need-to-know-about-the-panama-papers)
Canadian Banks Panama
Canadian banks have also been linked to the Panama papers, and immediately went on the defensive. It was revealed that RBC was involved in the creation of at least 370 foreign corporations to hide Canadian money. BMO’s CEO came out later in the week to defend Canadian banks. Despite this defence it was a bad week for the Big Banks in Canada. Fintrac, the Canadian Federal anti-money laundering agency fined an unnamed bank $1.1 million for failing to flag a transaction that was deemed suspicious. (source: http://www.cbc.ca/news/business/canadian-banks-panama-papers-1.3524836)
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