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: Canada’s GDP and manufacturing numbers are stronger than expected, the loonie continues to rise, young Canadians have low wages and poor job security, Tesla finally announces the release date for the Model 3, and two iconic Canadian chicken purveyors merge in a delicious deal.
Canada’s GDP surpasses expectations
Despite oil prices dropping to a 12 year low, the loonie seemingly in freefall hitting 69 cents US in January, stockmarket turmoil and concerns over the global economy, Canada is actually doing better than expected. In January Canada’s economy surpassed economists predictions by posting 0.6% growth, double what was expected. The low loonie might be a pain for travellers and shoppers but there are also signs that it is helping to boost the economy in some ways. Canada’s manufacturing sector posted its strongest numbers in over ten years. (Source: http://www.nasdaq.com/article/canada-gdp-advances-06-in-january-20160331-00449)
The loonie still has life
The loonie closed at over 77 cents US on Wednesday following comments made by Janet Yellen, Chair of the Federal Reserve regarding the US economy. Yellen insisted that the central bank would only raise rates slowly, tempering the value of the USD. Before closing the loonie hit 77 cents US, reaching its highest point since October. (Source: http://www.cbc.ca/news/business/loonie-oil-dollar-1.3512555)
Low wages, no job security for young Canadians
Despite good economic news on the GDP front, some troubling signs remain. According to the OECD (the Organisation for Economic Cooperation and Development) increasing job insecurity is taking its toll on younger segments of the workforce. Opportunity to advance from low-wage temporary or part-time employment is decreasing, with the study finding that fewer than 50% of people transition to full-time jobs within three months of the end of a temporary contract. Low wages and job insecurity are also limiting younger workers ability to become homeowners or start a family. In a similar report conducted by CIBC, job quality is at a 25 year low, despite unemployment remaining relatively low. (Sources: http://www.cbc.ca/news/business/precarious-jobs-holding-back-young-workers-oecd-finds-1.3082178 | http://www.cbc.ca/news/business/job-quality-in-canada-at-25-year-low-says-cibc-1.2982891)
Model 3 Revolution
After years of anticipation Tesla finally announced the release date for the new Model 3, which comes in at a fraction of the price tag of its predecessors, the Model S and Model X. At just $35 000 car and environmental enthusiasts hope that the Tesla Model 3 could become the 21st century’s Model T, ushering in the electric car revolution. Pre-orders have already hit 250 000 and are growing, including thousands from Canada. (Source: http://www.bbc.co.uk/news/business-35953817)
Two iconic Canadian chicken restaurants made the news this week as Swiss Chalet bought St-Hubert for $537 milion. The deal includes over 100 outlets (mostly in Quebec), a food processing plant, distribution centres and a real estate portfolio. (Source: http://www.thestar.com/business/2016/03/31/swiss-chalet-owner-cara-buying-st-hubert-for-537m.html)
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