The CAD/JPY currency pair, which expresses the value of the Canadian dollar in terms of the Japanese yen, has been edging its way toward levels that were seen prior to the start of 2020. As stocks began to sour in February this year, the Canadian dollar also started to fall alongside other commodity currencies. Currencies such as the Japanese yen rallied, which was unsurprising to most traders given the reputation of the yen as a conventional safe haven.

From the start of the fourth quarter of 2019 into the first quarter of 2020, CAD was trading against JPY inside of the range of 80-85, with an approximate midpoint being at the 83 handle (as illustrated below). A stronger CAD is in most cases a constructive for risk assets such as equities, especially when set such strength is against JPY.

CAD/JPY Price Action in 2020

(Source: TradingView. The same applies to all subsequent price charts presented hereafter.)

From the level of 85 down to the lows in March this year at the 74 handle, the midpoint is around 80, which the current market price for CAD/JPY is perched just above. The question now becomes whether we will see further strength.

Certain commodity currencies such as the Australian dollar and New Zealand dollar were able to retrace their steps back to their previous highs (after also crashing in February and March). These two currencies have already rallied against USD and JPY (both conventional safe havens in their own right). The Canadian dollar has struggled against the Japanese yen, although, interestingly, CAD is currently as strong against USD as it was prior to the emergence of the COVID-19 pandemic which shook financial markets (including FX) this year.

USD/CAD Price Action in 2020

(USD/CAD is now trading at similar levels to 2019; the Canadian dollar has effectively won back all its

FILE PHOTO: Calin Rovinescu, CEO of Air Canada speaks during a panel discussion on Cyber Security at the 2016 International Air Transport Association (IATA) Annual General Meeting (AGM) and World Air Transport Summit in Dublin, Ireland June 3, 2016. REUTERS/Clodagh Kilcoyne/File Photo

(Reuters) – Air Canada AC.TO has slashed its price to buy Canadian tour operator Transat A.T. Inc TRZ.TO, with the deal now worth about C$188.7 million ($143.86 million), down from C$720 million, as COVID-19 weighs on travel demand, the companies said in a statement on Saturday.

The country’s largest carrier had secured Transat shareholders’ approval for the deal last year with an C$18.00 a share bid, to bolster its then thriving leisure business.

But with the pandemic grounding flights globally, Air Canada faced shareholder pressure to renegotiate the deal which is still pending approval from European and Canadian regulators, Reuters reported in May.

Montreal-based Air Canada, like many of its global peers, has slashed flights, suspended financial forecasts and sought government aid as the industry deals with its worst slump.

Companies have been cancelling deals amid COVID-19 uncertainty, with aircraft parts suppliers Hexcel Corp HXL.N and Woodward Inc WWD.O abandoning their planned $6.4 billion all-stock merger in April.

Under revised terms of the deal, Air Canada said it will acquire all shares of Transat for C$5 per share, representing a premium of about 30.5% to Transat’s last close on Friday.

“Air Canada intends to complete its acquisition of Transat, at a reduced price and on modified terms,” said Calin Rovinescu, the carrier’s chief executive officer, in a statement.

“Consummating the initial deal at $18.00 was not an option that was viable given the full set of circumstances the Corporation is facing,” Jean-Yves Leblanc, chair of the special committee of the board of Transat said in a statement.

(Reuters) – Air Canada

has slashed its price to buy Canadian tour operator Transat A.T. Inc
, with the deal now worth about C$188.7 million ($143.86 million), down from C$720 million, as COVID-19 weighs on travel demand, the companies said in a statement on Saturday.

The country’s largest carrier had secured Transat shareholders’ approval for the deal last year with an C$18.00 a share bid, to bolster its then thriving leisure business.

But with the pandemic grounding flights globally, Air Canada faced shareholder pressure to renegotiate the deal which is still pending approval from European and Canadian regulators, Reuters reported in May.

Montreal-based Air Canada, like many of its global peers, has slashed flights, suspended financial forecasts and sought government aid as the industry deals with its worst slump.

Companies have been cancelling deals amid COVID-19 uncertainty, with aircraft parts suppliers Hexcel Corp

and Woodward Inc

abandoning their planned $6.4 billion all-stock merger in April.

Under revised terms of the deal, Air Canada said it will acquire all shares of Transat for C$5 per share, representing a premium of about 30.5% to Transat’s last close on Friday.

“Air Canada intends to complete its acquisition of Transat, at a reduced price and on modified terms,” said Calin Rovinescu, the carrier’s chief executive officer, in a statement.

“Consummating the initial deal at $18.00 was not an option that was viable given the full set of circumstances the Corporation is facing,” Jean-Yves Leblanc, chair of the special committee of the board of Transat said in a statement.

As part of the deal, Transat has also secured a new C$250 million short-term loan facility, Transat said.

(Reporting by Bhargav Acharya in Bengaluru and Allison Lampert in Montreal; Editing by Marguerita Choy)

Copyright 2020 Thomson Reuters.

Source Article

(Adds strategist quotes and details throughout; updates prices)

* Canadian dollar rises 0.5% against the greenback

* Canada adds 378,200 jobs in September

* Loonie touches a 1-month high at 1.3111

* Canadian bond yields were mixed across a steeper curve

By Fergal Smith

TORONTO, Oct 9 (Reuters) – The Canadian dollar strengthened
against its U.S. counterpart on Friday to notch its biggest
weekly advance in four months, driven by domestic data showing a
faster pace of job gains and rising hopes of U.S. stimulus that
boosted Wall Street.

Canada added 378,200 jobs in September after an increase of
246,000 in the previous month, handily beating analyst
expectations, as children returned to school and the economy
continued to reopen from coronavirus shutdowns, Statistics
Canada said.

“Accelerating job creation in Canada in September has
super-charged the Canadian dollar” said Michael Goshko,
corporate risk manager at Western Union Business Solutions.

Adding to support for the loonie, has been the move higher
in equities and commodities in October, Goshko said.

Shares rose globally on Friday as expectations grew
of a Democratic victory in U.S. elections next month that could
lead a big economic stimulus.

Canada sends about 75% of its exports to the United States,
including oil, which gave back some of this week’s strong rally
after an oil worker strike in Norway ended. U.S. crude oil
futures settled 1.4% lower at $40.60 a barrel.

The Canadian dollar was trading 0.5% higher at 1.3131
to the greenback, or 76.16 U.S. cents. The currency touched its
strongest intraday level since Sept. 8 at 1.3111.

For the week, the loonie was up 1.3%, its biggest advance
since early June.

Canadian government bond yields were mixed across a steeper
curve, with the 10-year yield up about half a basis
point at 0.629%. On Thursday, it touched

By Madhvi Pokhriyal and Noor Zainab Hussain

(Reuters) – Canadian mergers and acquisitions are set to increase following a modest third-quarter recovery from multi-year lows, as market stability and access to capital give companies the confidence to negotiate and price transactions.

Equity offerings also picked up in the three months through September, as stock market recovery following a tumultuous few months early in the coronavirus pandemic encouraged issuers to tap markets to recapitalize.

Some $40.9 billion worth of M&A deals were announced in the third quarter, the highest since the onset of the coronavirus crisis in late 2019 and a 200% jump from the three months ended in June, Refinitiv data showed. But it was lower than the $50.7 billion worth of transactions from a year ago, the data showed.

“There are clearly indications that we’re in the early stages of recovery, a lot more strategic dialogue going on and private equity is continuing to be very active,” said Emmanuel Pressman, partner at Osler, Hoskin & Harcourt LLP.

Canadian security firm GardaWorld’s 2.95 billion pound ($3.8 billion) offer for Britain’s G4S <GFS.L> and cable operator Altice USA Inc’s <ATUS.N> C$10.3 billion ($7.7 billion)proposal to buy Canadian cable company Cogeco Inc <CCA.TO> were among the deals announced in the past quarter.

“We expect continued growth in M&A volumes in 2021, fueled by reduced volatility, increased market confidence and improved access to capital,” said Dany Beauchemin, co-head, Global Investment Banking and Canadian Corporate Banking at Scotiabank.

A deal frenzy in September led to a record third quarter with more than $1 trillion worth of transactions globally https://in.reuters.com/article/us-global-m-a-q3-idCAKBN26L23O.

In Canada, total equity linked deals rose 19% in the third quarter to C$10.5 billion from the previous quarter, though it was flat on the year.

“As volatility and COVID-19 concerns subside, we see both