By Commodity News Service Canada
Winnipeg, August 27 – The Canadian dollar was higher on Wednesday, as it benefited from a major corporate deal that will see American fast food giant Burger King buy Canadian coffee-and-doughnut chain Tim Hortons for $12.5 billion.
At 9:00 CDT Wednesday morning, the loonie rose 0.41 of a cent to US$0.9172 or US$1 = C$1.0951.
The cash and stock deal will see the parent of the U.S. firm, 3G Capital, own 51 per cent of the new company, which will be the world’s third largest quick service restaurant company.
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The loonie has been pushed higher by big corporate deals in the past. That’s because a foreign buyer acquiring a Canadian company will need Canadian currency to close the deal, boosting demand for the loonie on financial markets.
Traders were also awaiting a strong economic growth report from Statistics Canada’s June reading on gross domestic product, scheduled for release on Friday. Economists are expecting that GDP grew by 0.2 per cent in June, which would translate into an annualized growth of 2.6 per cent.
Traders will also be looking ahead to next Wednesday, when the Bank of Canada releases its next decision on interest rates.
