Every week we round up the biggest business stories. This week: the loonie comeback is underway, oil prices are up, house sales in Vancouver and Toronto skyrocket but plummet in Calgary, shock election results in Alberta and Britain, unemployment falls in the US, and exports drop in China.
After losing 8% of its value in January alone as part of a prolonged losing streak, the loonie has bucked the trend and rebounded strongly. Canada’s currency is up 4% against the USD this quarter and has been the best performing currency in the world since March.
Oil prices rebound
Oil prices have also been rebounding and are now hovering around the $60 per barrel mark. Unsurprisingly the rising price of oil has been a major factor behind the loonie’s resurgence.
Home sales in Vancouver, Toronto and Calgary
House sales are skyrocketing in Vancouver and Toronto, up 37% and 17% respectively. Meanwhile the number of listings in Vancouver is actually down 19% creating a strong seller’s market which has contributed to a 12.5% rise in prices in the city. In Calgary, which is suffering from low oil prices, house sales are down 22% in April.
NDP take Alberta
In a shock election, Rachel Notley’s Alberta NDP won a majority government in a historic election. “I think we might have made a little bit of history tonight” the Premier elect announced in her victory speech. The Progressive Conservatives had been in power in Alberta since 1971 but dissatisfaction has been growing. It is unclear what the effect will be on the oil industry but Ms. Notley has promised to work with, and not against, big oil companies despite her party’s environmentalist policy preferences.
Shock Conservative Majority
In Britain, David Cameron’s Conservative Party defied pollsters by winning a shock majority government. The Scottish National Party also increased its share of seats to 56. Disappointing losses for Labour and the Liberal Democrats resulted in the resignation of Ed Miliband and Nick Clegg while Nigel Farage of the far-right UK Independence Party will also step down. Mr. Cameron’s victory boosted the markets and the pound but a promised referendum on EU membership could hurt the economy.
Unemployment drops in the UK
Unemployment in the US has dropped to 5.4%, the lowest level in 7 years. American businesses added 223,000 jobs in April alone leading to a surge on Wall Street. Wages are also up by 2.2%. If the economic recovery continues on this trend then the US Federal Reserve could raise interest rates.
China’s exports fall
China’s exports have fallen 6.2% in April despite predictions that they would rise. Imports also fell by 16.1%. Both figures indicate that China’s slowdown is very real. Meanwhile the International Monetary Fund (IMF) has urged China to stop interfering in the foreign exchange market and allow the yuan to float with greater flexibility in order to fight the slowdown.
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