Newspaper article The Canadian Press

Golds Pull TSX Lower, G20 Finance Ministers Set to Deal with Currency Worries

Newspaper article The Canadian Press

Golds Pull TSX Lower, G20 Finance Ministers Set to Deal with Currency Worries

Article excerpt

TSX moves lower ahead of G20 meeting

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TORONTO - The Toronto stock market closed lower Friday as traders hoped a weekend meeting of G20 finance ministers would tackle worries that some countries are using their currencies for economic gain.

The S&P/TSX composite index was down 35.16 points to 12,686.63, led by steep declines for gold stocks while the TSX Venture Exchange slipped 10.91 points to 1,185.65.

The Canadian dollar was down 0.49 of a cent to 99.39 cents US as Statistics Canada reported that manufacturing sales fell 3.1 per cent during December to $48 billion, led by lower sales in the transportation equipment sector. It was the biggest decline since May 2009. Economists had expected only a 0.8 per cent pullback.

New York finished well off early levels after a Bloomberg report warned of a very tough month for retailing giant Wal-Mart Stores Inc.

It quoted an email from Jerry Murray, a Wal-Mart vice president, to another executive that said "February (month-to-date) sales are a total disaster." Murray also called this February the worst start to a month in his seven years with the company.

Wal-Mart shares closed down 2.15 per cent to US$69.30.

The Dow Jones industrials gained 8.37 points to 13,981.76, the Nasdaq was down 6.63 points to 3,192.03 while the S&P 500 index slipped 1.59 points to 1,519.79.

The University of Michigan's consumer confidence index for February came in at 76.3, better than the 75 reading that was expected and up from 73.8 in January.

Meanwhile, the G20 meeting in Moscow takes place amid speculation of a "currency war" in which countries devalue their currencies to gain a competitive edge.

The Japanese yen has been the currency primarily in focus this week.

Japan, the world's third-largest economy, faces charges that it is trying to lower the value of the yen to stimulate its economy.

The yen fell to a 21-month low against the U.S. dollar this week and a near three-year trough against the euro.

As the yen falls, Japanese exports become cheaper compared with goods from other regions that are also trying to pull out of an economic malaise.

Earlier this week, the volatility in the currency markets prompted the Group of Seven leading industrial nations, which include the U.S, Canada, four European Union countries, as well as Japan, to warn that volatile movements in exchange rates could adversely hit the global economy and to reaffirm their commitment to market-driven exchange rates.

On Friday, the yen strengthened ahead of the G20 meeting with analysts expecting pressure to be exerted on Japan's finance minister and central banker to at least commit to not allow the yen to fall much more.

"The greater fear would probably be that this goes further and significantly so," said Bob Gorman, chief portfolio strategist at TD Waterhouse. …

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