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These are stories Report on Business is following Wednesday, Aug. 10. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

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Whither interest rates The Federal Reserve took a page from the Bank of Canada, and in doing so will no doubt affect Canadian interest rates.

The U.S. central bank said yesterday it believes its benchmark rate will remain at an historic low near zero until mid-2013. That's similar to what the Bank of Canada did during the depths of the recession, when it gave markets some certainty with a timeline on rates.

As The Globe and Mail's Boyd Erman reports, the Federal Open Market Committee, the rate-setting panel, also painted a bleaker outlook for the U.S. economy, which also has implications for Canada's central bank and Governor Mark Carney.

"With the Fed on hold for as far as the eye can see, there is now even less pressure on the Bank of Canada to move on rates any time soon," said Douglas Porter, deputy chief economist at BMO Nesbitt Burns.

"The mayhem in equities in recent weeks, and the subsequent marking down of the global economic outlook, had already pushed back rate expectations markedly in any event ... It now appears highly unlikely that the Bank of Canada will be hiking rates in 2011, and may wait well into 2012 if the North American economy does not pick up relatively quickly."

RBC strategists Mark Chandler and Ian Pollick agreed.

"In terms of economic implications, a more downbeat assessment of U.S. growth will, at some point, eat into the pace of advance in our domestic economy," they said. " With respect to monetary policy, the main result of an FOMC on hold for for the next two years effectively limits the pace at which trend tightening can resume."

The Bank of England today also cut its forecast for the year.

France shifts into spotlight Wary bond investors are beginning to look a bit more closely at France, the biggest economy yet to be affected by the spreading crisis in the euro zone, though to a lesser extent.

French President Nicolas Sarkozy cut short his vacation and called an emergency meeting today, and Finance Minister Francois Baroin, pledging to meet the country's deficit-slashing targets, moved up the date for final budget decisions.

The situation in France is nothing like that of the weaker nations in the 17-member monetary union, where Greece, Portugal and Ireland have resorted to bailouts. But "it looks like some bond investors have become more nervous about France's fiscal outlook," said senior economist Sal Guatieri of BMO Nesbitt Burns.

Mr. Guatieri noted the widening spread in the yields of French and German bonds, though part of that is a flight to safety into Germany.

The European Central Bank again today purchased Italian and Spanish bonds in an ongoing effort to stop the crisis from spreading further. While France shows no signs yet of succumbing to the debt troubles, it is unsettling to watch as the virus jumps from border to border.

"The ECB's purchases of Spanish and Italian bonds this week have greatly lowered government borrowing costs, stemming contagion fears," Mr. Guatieri said. "Unfortunately, still-nervous bond investors have shifted their sights on triple-A France, where credit spreads against Germany have blown out to euro-era highs."

France's debt-to-GDP ratio has swelled to more than 80 per cent from about 65 per cent just a few years ago.

For a look at the spread on bond yields, see the accompanying infographic or click here.

Swiss takes new currency steps Switzerland's central bank moved again today to hold down the value of its surging franc.

Among the steps, the Swiss National Bank said it would markedly boost liquidity in the money market and expand bank sight deposit deposits, meaning, overall, that it will flood the market with francs.

The central bank is trying to push interest rates down even further, said Camilla Sutton, Scotia Capital's chief currency strategist.

Like the Japanese yen, the franc is attracting investors as a haven currency, driving it up to where the central bank deems it to be massively overvalued.

Ms. Sutton said she suspects the central bank's actions will have "only a minor impact" on the franc's rapid rise.

China surplus widens China's trade surplus has hit its highest level in more than two years, buoying hopes that there's still some spunk in the global economy amid an increasingly gloomy outlook.

The surplus rose in July to $31.5-billion (U.S.), as exports climbed 20.4 per cent from a year earlier, and imports 22.9 per cent, Carolynne Wheeler reports from Beijing.

The widening surplus could again spark criticism of how China manages its yuan, which strengthened today to a record against the U.S. dollar.

While it's good news from the global recovery, some economists are still wary.

"Overall, today's trade data provide further evidence that China has avoided a hard landing," said Qinwei Wang of Capital Economics.

"However, the increase in the trade surplus to its highest level in more than two years ... is a reminder that China is not supporting growth elsewhere in the world. If we are right that commodity prices will fall further in coming months, then China's surplus is likely to become even greater."

Quebecor slips Canada's Quebecor Inc. posted a dip in second-quarter profit today, though revenue climbed 6 per cent from a year earlier.

The media giant earned $55.2-million in the quarter, or 86 cents a share, basic, down from $60.8-million or 95 cents a year earlier. Revenue increased to $1.05-billion.

"Attesting to the success of the corporation's investment and development strategy, revenues grew in all business segments despite aggressive competition in many of those segments," chief executive officer Pierre Karl Peladeau said in a statement.

Analyst Maher Yaghi of Desjardins, whose price target on Quebecor shares is $39, is keen on the stock.

"With the stock having declined from its highs, we believe that valuation, as well as improving cash flow and profitability metrics in 2012, should offer good support for the stock," he said.

"While Quebecor's balance sheet leverage is more aggressive vs. peers, we look favourably on its decision to invest in wireless, which should deliver substantial long-term growth."

In International Business today The global slowdown may stifle oil demand growth next year, the West's energy watchdog said today, warning that tightening supplies could still spur yet more oil price volatility. Dmitry Zhdannikov and Christopher Johnson of Reuters report from London.

In Economy Lab today Richard Gilbert examines the controversy of how inflation could address the numerous challenges faced in the U.S.

In Personal Finance today The market's wild swings mean retirees need a steady income stream that stocks and bonds may not provide.

On my diet the money saver is beans, which are inexpensive, says Preet Banerjee.

From today's Report on Business

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