These are stories Report on Business is following Wednesday, March 4, 2015.

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Which way?

Sébastien Galy has a thought for those who think the Canadian dollar is headed for the 69-cent range.

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The senior foreign exchange strategist at Société Générale thinks the loonie is close to hitting bottom, with a rebound in sight after that.

"It is now cheap on all metrics and the potential for a widening of rate differential expectations is close to peaking," he said.

By that he means that the loonie has been slammed not only by the oil crash, but by what's expected from the Canadian and U.S. central banks.

The Bank of Canada surprised the markets in January with a rate cut of one-quarter of a percentage point, and some observers think it will cut one more time at some point.

The Federal Reserve, on the other hand, is headed for a rate hike, possibly in June.

"I think the loonie is a few weeks away from bottoming out and eventually strengthening versus the dollar as oil also recovers into the second half of the year," Mr. Galy said.

"A lot of bearishness is being priced into BoC vs. Fed expectations which should peak, while the loonie is cheap vs. the USD on any fair value metrics," he added, referring to the U.S. dollar by its symbol.

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Having said that, the loonie will test lower levels first, perhaps on Friday with the release of the U.S. jobs report.

By late afternoon, the currency had touched a low of 79.75 cents U.S., and a high of 80.59 cents after the Bank of Canada's decision to hold the line on interest rates.

Camilla Sutton, chief currency strategist at Bank of Nova Scotia, expects the loonie will test new lows this year, but then stabilize.

"The drivers of this more subdued weakness are expected to be ongoing USD strength, oil prices that stabilize but fail to rally materially, Canadian economic performance relative to the U.S., negative sentiment and outflows," she said.

Poloz stands pat

The Bank of Canada says it has done its job, for now, anyway.

Governor Stephen Poloz and their colleagues held their benchmark rate at 0.75 per cent today, opting not to cut again after January's surprise reduction of one-quarter of a percentage point, The Globe and Mail's Barrie McKenna reports.

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"Financial conditions in Canada have eased materially since January, in response to the bank's recent monetary policy action and to global financial developments," the central bank said in its decision.

"This easing is reflected across the yield curve and in a wide range of asset prices, including the Canadian dollar," it added.

"These conditions will mitigate the negative effects of the oil price shock, further boosting growth through stronger non-energy exports and investments."

The central bank cited the hit from the collapse in oil prices, adding that Canada's fourth-quarter economic growth, an annual pace of 2.4 per cent, was what it expected.

"The oil price shock had a modest early impact on aggregate demand, and a larger effect on income," it noted.

"The bank continues to expect that most of the negative impact from lower oil prices will appear in the first half of 2015, although it be even more front-loaded than projected in January."

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The central bank added that its stance now is "still appropriate," giving no signal as to what may come next.

Still, some economists still expect another rate cut down the road.

"We still expect that the slump in energy prices, alongside signs of a slowdown in some regional housing markets, will prompt the bank to cut rates again to 0.50 per cent in April," said Paul Ashworth, chief North America economist at Capital Economics.

"In particular, the statement hinted that the impact from lower energy prices might be 'even more front-loaded than projected in January.'"

The central bank, of course will shift with the winds, particularly those blowing from the oil patch.

"The BoC is clearly prepared for more negative news from Alberta given that it says the impact of the oil price shock will be more front-loaded than it thought earlier," said economists Stéfane Marion and Paul-André Pinsonnault of National Bank, adding it will take a bleak surprise to spark another cut, which, at this point, isn't likely in April.

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"But as we've seen in recent months, the BoC's message could change depending on economic data, e.g. Central Canada's ability to offset anticipated job losses related to the oil shock, as well as the potential fiscal drag from upcoming provincial budgets that are not yet factored in the BoC's current forecasts. Our view is that the odds remain tilted to another rate cut."

Having said that, as Royal Bank of Canada's Mark Chandler put it, the central bank has opened the door to "one and done."

Torstar flat

All the romance has gone out of Torstar.

The Canadian media company today posted a flat fourth-quarter profit of $20.6-million or 26 cents a share, The Globe and Mail's James Bradshaw reports.

For the year, profit climbed to $172.7-million, or $2.16, from a loss a year earlier.

But the 2014 results include the gain from the sale of Harlequin.

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That sale closed last summer, meaning a pretax gain of almost $225-million.

The quarterly results are anything but steamy, though chief executive officer David Holland pointed to 2014 as "a very significant year" given the decision to sell the romance book publisher.

RBI cuts rates

India's central bank is getting in on the surprise rate-cutting bandwagon. Again.

The Reserve Bank of India today cut its benchmark rate, for the second time since the start of the year.

Down by a further one-quarter of a percentage point, the key rate now stands at 7.5 per cent.

"Softer readings on inflation are expected to come in through the first half of 2015-16 before firming up to below 6 per cent in the second half," said central bank chief Raghuram Rajan.

"The fiscal consolidation program, while delayed, may compensate in quality, especially if state governments are co-operative."

He was referring to Prime Minister Narendra Modi's budget late last month, which, as Kevin Carmichael reports, laid out a measured economic reform agenda.

The central bank chief also said he will target a 4-per-cent inflation rate within a few years.

Today's rate cut comes about a month ahead of the central bank's next meeting in early April.

"It came as a surprise because the recently presented budget gave no indication of the government either adhering to its fiscal consolidation objective for the next year or of working towards improving the quality of the deficit – save for its stated intent," said Kunar Kumar Kundu of Société Générale.

Toronto home sales, prices up

Resale homes are flying off the shelves in Toronto.

Sales in February climbed 11.3 per cent in February, to 6,338, from a year earlier, the Toronto Real Estate Board said today.

Active listings fell 8.7 per cent, which means "that market conditions became tighter, leading to more competition between buyers," the group added.

The average price rose 7.8 per cent to $596,163.

The average price of a detached house, by the way, is above $1-million, up almost 9 per cent from a year ago.

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