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Daily FX Commentary

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Daily FX Commentary

Mon, May 19 2008, 10:28 GMT

Investica Ltd


CAD correction threat

The Canadian dollar continued to attack US dollar support levels below the 1.00 level on Friday and pushed to two-month highs near 0.9950. The Canadian dollar was boosted by renewed gains in oil prices with no significant domestic influences.

The Canadian dollar will also continue to draw some near-term support from the increase in risk appetite, especially as confidence towards the North American economy has stabilised while energy prices will remain a key influence.

The Canadian currency was holding around 0.9980 in early Europe on Monday as a Saudi pledge to boost oil output curbed further increases in oil prices, but the currency then strengthened to 0.9930.

The Canadian dollar could remain firm in the very short term, but will struggle to extend gains beyond current levels given the risk of a speculative bubble in energy prices.        


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Investica Ltd http://www.investica.co.uk | tim.clayton@investica.co.uk

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