Canadian exporters such as West Fraser Timber Co. are climbing as the central bank’s surprise interest rate reduction weakened the currency, giving the companies an immediate boost while underscoring the deepening risk from the oil-price crash.
While the cut highlighted concerns about the nation’s economic outlook, the benchmark Standard & Poor’s/TSX Composite Index (SPTSX) climbed 1.8 percent yesterday partly on the prospect that a lower Canadian dollar would help companies that price their goods in U.S. dollars. The index rose another 1.4 percent today.
“It’s good news for manufacturers in Ontario, for example, or for exporters generally,” David Garofalo, chief executive officer of Toronto-based HudBay Minerals Inc. (HBM), said by phone. “For companies like ourselves that have operating costs denominated in Canadian dollars and revenues in U.S. dollars, it is a win.”
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