The Canadian dollar trades near 78 cents U.S. amid seven-day winning streak

The Canadian dollar is into a seventh straight day of gains. The winning streak pushed the loonie above 78 cents U.S. this morning, hitting a high of US$0.7813 immediately after StatsCan reported surprisingly strong manufacturing sales for the month of June. The dollar has pulled back since then, and one investment manager warned Canada's currency is defying economic fundamentals.

"Some people have pointed out that the strength in the Canadian dollar is somewhat contrary to the underlying economic data we're seeing in Canada," JC Clark CEO Colin Stewart told us before the latest manufacturing data was released. "Until we see a real pick up in the Canadian economy, there's going to be an upward cap as far as how high that Canadian dollar can move." Stewart went on to point out that if the dollar strengthens too much, some observers will raise concerns the dollar will slow down Canada's manufacturing sector. 

Canada's manufacturing sales in June rose 0.8 per cent from the previous month, according to data released by Statistics Canada on Tuesday. Analysts had expected a 0.5 per cent gain.

Tracking the smart money

It’s Amber Kanwar's favourite day of the quarter because we get to peek inside the portfolios of some of America’s savviest investors. The latest batch of 13F filings revealed Warren Buffett’s Berkshire Hathaway trimmed its stake in Suncor to 1.34 per cent from 1.8 per cent (Berkshire also sold some Wal-Mart stock and picked up more Apple shares), while John Paulson loaded up on Valeant (taking Paulson & Co.’s stake in the drugmaker to 5.49 per cent from 3.82 per cent). Amber will sift through these and other notable moves documented in the 13Fs. 

Couche-Tard reportedly closing in on CST brands 

The Wall Street Journal is reporting Alimentation Couche-Tard “is the likely winner” in the auctioning off of CST Brands, a US$3.35-billion operator of fuel stations and convenience stores across the U.S. and six Canadian provinces. To be certain, nothing is confirmed and negotiations could stall/fail. But Couche-Tard’s appetite for M&A is well-documented, and the CEO hinted last month that more deals could be in the works (“We continue to grow,” Brian Hannasch said in the company’s fourth-quarter earnings release, “and we do not intend to slow down any time soon.”) 

Roots CEO maps out growth strategy 

Almost 10 months after Searchlight Capital bought a majority stake in Roots, we’re going one-on-one with the retailer’s new chief executive officer. BNN's Kristina Partsinevelos got a broadcast exclusive with Jim Gabel that will air today. Gabel discusses the iconic brand’s plan for expansion in Canada and Asia – and hints at market share he’s looking to grab from a now defunct retailer.

BHP haunted by U.S. shale

Once again, BHP Billiton is paying the price for dipping its toe in the U.S. oil and gas sector. The miner reported a FY 2016 loss of US$6.39 billion this morning, weighed down by almost US$8 billion in charges, including a US$4.9-billion impairment on its U.S. onshore assets.  The company also slashed its dividend 75 per cent. CEO Andrew Mackenzie is maintaining a brave face, telling reporters BHP will “start this new financial year with real momentum.”  As for Jansen, that Saskatchewan potash project that factored mightily in the company’s failed attempt to buy PotashCorp, BHP said Tuesday work is “steadily progressing,” and it plans US$200M in capex on potash this fiscal year. 

The U.S. vs. Volkswagen

We’ll have another opportunity today to compare and contrast how the United States and Canada have responded to VW’s emissions-rigging scandal. The Wall Street Journal says U.S. prosecutors are working toward a settlement in the criminal case against the German automaker. As BNN's Jameson Berkow has been reporting consistently for the last week or so, Canadian owners of the VW vehicles involved in the scandal are facing a much longer wait than their U.S. counterparts for any kind of resolution.   

Releases/events:

-Notable earnings: Home Depot, TJX

-Notable data: Canadian manufacturing sales, U.S. CPI, U.S. housing starts & building permits

-0900 ET: Trudeau media avail in Bridgetown, NS

-1310 ET: Finance Minister Bill Morneau delivers remarks and speaks to the media in Saskatoon

TSX 15,000 watch:

Closed Monday at 14,777.02

Last traded at 15,000 on June 4, 2015

Every morning Commodities host Andrew Bell writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Today's note was written by BNN's Managing Editor Noah Zivitz. Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.