Dollar takes a wild ride

Rioters in France and a possible election in Canada helped trigger a wild day in currency markets. The Canadian dollar sank nearly three- quarters of a cent in overnight trading after the New Democratic Party announced it will no longer support Paul Martin’s minority government.

Also overseas, the euro fell to a two- year low against the greenback as rioting in France entered the twelfth night.

Then, quicker than you can say Molotov cocktail, the tide — and the financial markets’ appetite for U. S. dollars — turned.

“ That is the problem with currencies,” said Andrew Busch, global market strategist at BMO Nesbitt Burns in Chicago. “ What happens in the morning can be totally undone by the afternoon.” The loonie fell steadily after North American markets closed on Monday, bottoming out at 83.50 cents ( U. S.) by yesterday morning.

Then, just as economists were emailing their clients explanations, the Canadian dollar shot up, ending the day at 84.30 cents, up 0.04 of a cent.

cisco- based Fairmont chain into the old CP Hotels to create today’s Fairmont Hotels & Resorts. To be sure, there are plenty of sluggish blue- chip companies in need of a managerial shakeup. The raiders, by contrast, seek not to repair troubled companies but deprive them of their most valuable assets for a fat gain to meet their own year- end numbers.

Recent victims of this new generation of raiders include Algoma Steel Inc., Quebec charter airline Transat A. T. Inc.; General Motors Corp.; Time Warner Inc.; and leading U. S. newspaper chain Knight Ridder Inc. The hedge funds pressuring Algoma to hand over its rainy day fund to them in the form of a massive dividend or share buyback that would boost the stock price are oblivious to the volatility of the steel business — or, for that matter, the perilous vagaries of the airline and tourism industries. Icahn, 69, is not a hotelier, and his most conspicuous hands- on experience was a brief, unhappy struggle to run TWA Corp. As a rule, Icahn and his ilk are opportunists who strike at a moment of vulnerability, when business conditions for a particular company are at their low ebb. Had Four Seasons been exposed to such predators, Sharp would not have been able to bet the company more than once since the mid-1980s to painstakingly assemble the leading luxury hotels in each of the North American, European and Asian cities in which it operates, where it now commands the highest room rates in town.

Fairmont CEO William Fatt indicated yesterday he’s willing to meet with Icahn’s representatives, perhaps to offer a tutorial on how the whole is worth more than the parts at Fairmont ( it wouldn’t be much of a chain if properties in key markets were abruptly sold off). To explain that there are restrictions on the sale or redevelopment of Fairmont properties in the Rockies located in national parks, or the historic Algonquin in St. Andrews, N. B., which is owned by the New Brunswick government. And to speculate about the potential whiteknight role of al Waleed, whose wealth exceeds even that of Icahn’s net worth of $ 8.5 billion ( U. S.).

Fairmont, having played by the rules of the pension funds and other institutional members making up the Canadian Coalition of Good Governance thus left itself open to Icahn’s predations. Coalition members might now put their money where their principles are and buy a big enough slug of Fairmont stock to keep Icahn at bay.

It’s either that or lose one of the few remaining local big- cap companies in which they’re able to invest.