> Loonie sinks to 14-month low,
TORONTO — A rekindled softwood lumber trade dispute with the United States pushed the Canadian dollar to its lowest level in 14 months on Tuesday.
The loonie lost 0.29 of a U.S. cent to close at 73.72 cents US, after American President Donald Trump imposed tariffs averaging 20 per cent against Canadian softwood exports.
The last time the loonie closed below that level was Feb. 24, 2016, when it finished the day at 73.06 cents US.
Craig Jerusalim, a portfolio manager of Canadian equities with CIBC Asset Management, said the trade dispute wasn’t the only reason why the loonie closed lower Tuesday. “With oil being below $50 and gold being pressured, there’s a whole host of reasons why the Canadian dollar has lagged,” Jerusalim said.
He added that other protectionist measures — such as the renegotiation of NAFTA and a possible tax on Canadian dairy products — are also weighing on the loonie.
While the tariffs will hit forestry, National Bank senior economist Krishen Rangasamy said the impact on the broader Canadian economy will be limited.
Lumber accounted for only 1.2 per cent of all exports and less than 0.3 per cent of all Canadian jobs last year.
Despite the challenges, shares of several lumber producers hit 52-week highs on relief the duties weren’t as steep as some feared.
Shares of B.C.-based Canfor closed up 7.9 per cent on the TSX, West Fraser 8.8 per cent, Interfor 4.3 per cent and Norbord 3.2 per cent. Quebec-based producer Resolute was up 2.7 per cent and Tembec 0.33 per cent.
Paul Quinn of RBC Capital Markets said he was surprised by the rally, but anticipates a correction with lumber prices likely to fall. “You’re going to have shifts that are going to come off, you’re going to have mills that close and you’re going to have unemployment as a result,” he said from Vancouver.
Meanwhile, the S&P/TSX composite index added 32.73 points to 15,745.19, led by the base metals sector, which added 2.23 per cent, while gold stocks retreated 4.13 per cent.
In New York, markets continued Monday’s relief rally following the first round of France’s presidential election. Investors are breathing a sigh of relief now that probusiness and pro-European Union candidate Emmanuel Macron has emerged as the leading contender in a run-off election that will take place in two weeks.
The Dow Jones industrial average gained 232.23 points to 20,996.12, the S&P 500 index rose 14.46 points to 2,388.61, and the Nasdaq composite index climbed 41.67 points to a new record of 6,025.49.
In commodities, the June crude oil contract rose 33 cents at US$49.56 per barrel and the June natural gas contract rose half a cent at US$3.17 per mmBTU. The June gold contract was down $10.30 at $1,267.20 an ounce and the May copper contract was up three cents at $2.58 a pound.
Teck profit, sales surge
VANCOUVER — Teck Resources Ltd. had a big increase in first-quarter profits thanks to higher prices for its coal, copper and zinc but the company still fell short of analyst estimates due to weak sales volumes.
The miner had $572 million of net income in the first quarter, or 99 cents per share. That’s six times higher than in Teck’s first quarter last year.
Teck said steelmaking coal was the biggest factor behind the surge, with prices nearly tripling from a year ago, while copper prices rose 25 per cent and zinc was up 66 per cent.
Total revenue was $2.89 billion, up $1.19 billion or 70 per cent from the first quarter of 2016.