By Commodity News Service Canada
Winnipeg, August 25 – The Canadian dollar was lower on Monday as traders looked ahead to the latest reading on economic growth and considered a potential merger and acquisition deal involving the restaurant chain Tim Hortons, analysts said.
At 9:06 CDT Monday morning, the loonie was down 0.07 of a cent to US$0.9130 or US$1 = C$1.0950.
There is a potential of Burger King buying Tim Hortons in aims of creating a new, publicly traded company with its headquarters in Canada. Burger King, currently based out of Miami, could cut its U.S. tax bill in half if they had a new base in Canada. Tax inversions have become increasingly popular among U.S. companies trying to cut costs, traders say. The majority owner of Burger Kind, 3G Capital, would own the majority of shares of the new company.
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The deal could have an impact on the Canadian dollar as Tim Hortons has a market capitalization of C$9.5 billion and in the past the loonie has been pushed higher by big corporate deals.
Meanwhile, Statistics Canada releases the June reading on gross domestic product growth this upcoming Friday. Economists are expecting the agency will report that GDP grew by 0.2 per cent in June, which could translate into an annualized growth of 2.6 per cent.
The U.S. durable goods reports will be out on Tuesday and economists are looking for a gain of seven per cent, reflecting a strong pickup in aircraft orders. Durable goods orders were expected to rise by 0.4 per cent, excluding transportation.
At 9:06 CDT Monday morning, the TSX was up 54.81 points to 15,590.36.
