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7 top Canadian stocks that have a secret weapon in the commodities rout

Valeant Pharmaceuticals International Inc., beverage purveyor Cott Corp., and real-estate services provider Colliers International Group Inc. are among the top five-ranked equities.

The best-performing Canadian stocks amid the commodities rout have one thing in common: the mighty U.S. dollar. Earnings estimates published by Bloomberg suggest their run will continue.

How short sellers are accumulating a new front in their war on Canadian stocks

The TSX continues to be weighed down yesteryear year by commodities. But now it faces a new threat: foreign investors piling in to bet against Canada. Read on

Seven of the top ten best-performing stocks in the Standard & Poor\’s/TSX Composite Index this season report their businesses in U.S. dollars and produce a significant amount of their sales there. Including the top five-ranked equities: drugmakers Concordia Healthcare Corp. and Valeant Pharmaceuticals International Inc., beverage purveyor Cott Corp., holding company Constellation Software Inc. and real-estate services provider Colliers International Group Inc.

The U.S.-focused firms are exploiting the rebound within the world\’s biggest economy and its currency like a commodities rout and worries about a housing bubble batter material and financial stocks.

\”The change in the currency is monumental and will have a very big influence on the economy as well as on companies once we move ahead,\” said Douglas Porter, chief economist at Bank of Montreal in Toronto. \”The winners is going to be those companies that have most of their costs in Canadian dollars and their revenue in U.S. dollars.\”

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The Canadian dollar\’s slump to some 10-year low amid a global plunge in commodities may come as the Federal Reserve prepares to raise interest rates prior to the end of the year, exacerbating an already widening gap between the two currencies.

Decade Low

The loonie plunged to some low of C$1.3103 against the U.S. dollar on July 24, the cheapest intraday level since September 2004. The currency has dropped 11 per cent this year as oil, the country\’s biggest export, plunged and the Bank of Canada cut interest rates twice to fight the spreading economic malaise. The currency was trading at C$1.2932 per U.S. dollar at 4:20 p.m. in Toronto on Tuesday.

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