Canadian dollar up, currency benefits from Burger King's Tim Horton acquisition
TORONTO - The Canadian dollar closed sharply higher Wednesday, benefiting from a major deal that will see American fast food giant Burger King buy Canadian coffee and doughnut chain Tim Hortons for $12.5 billion.
The loonie rose 0.81 of a cent to 91.12 cents US.
The cash and stock deal will see the parent of the U.S. firm, 3G Capital, own 51 per cent of a new company which will be the world's third-largest quick service restaurant company.
The loonie has been pushed higher in the past by big corporate deals. 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 also anticipated a strong economic growth update Friday when Statistics Canada releases the June reading on gross domestic product. Economists expect that GDP grew by 0.2 per cent in June, which would translate into annualized growth of 2.6 per cent.
And next Wednesday, the Bank of Canada releases its next decision on interest rates.
On the commodity markets, October crude in New York inched up two cents to US$93.88 a barrel.
December copper was down one cent to US$3.20 a pound, while December gold bullion faded $1.80 to US$1,283.40 an ounce.
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