Wednesday, October 31, 2007

Canadian Dollar Rises to 47-Year High Before U.S. Rate Decision

Canada's dollar rose to the highest
since 1960 before the Federal Soldier Reserve's interest-rate meeting
where economic experts prognosis adoption costs will be cut to prevent
the world's biggest economic system from falling into a recession.

Canada's dollar rose to $1.0496 at 4:48 p.m. inch Toronto,
from $1.0482 yesterday. It touched $1.0511, the peak since
March 28, 1960. One U.S. dollar purchases 95.26 Canadian cents.

The U.S. cardinal depository financial institution is expected to cut adoption costs a
quarter-percentage point to 4.5 percentage tomorrow, according to
interest-rate hereafters traded on the Windy City Board of Trade. That
would get rid of the U.S. benchmark charge per unit advantage over Canada. Bankers' credences hereafters propose the Depository Financial Institution of Canada will
keep the cardinal loaning charge per unit unchanged at 4.5 percentage this year.

''The marketplace is in a retention form before the U.S. rate
decision,'' said Saint Matthew Strauss, a senior currency strategist
at red blood cell Capital Markets in Toronto. ''If the Fed's statement is
more dovish than the marketplace expects, it will fuel more than than additions in
the Canadian dollar.'' Richard Strauss said the currency may prolong its
gains around the $1.05 degree by the end of this year.

Canada's dollar erased an earlier worsen after the
Conference Board's measurement of U.S. consumer assurance drop more
than prognosis this month, to the last since October 2005, a
sign Americans are growing concerned about falling place values,
rising combustible measures and dimmer occupation prospects. Canada directs 80
percent of its exportations to the U.S.

Factory Prices

A separate study showed Canadian mill terms drop more
than prognosis in September, as a strengthening Canadian dollar
reduced the value of exported goods.

Factory terms drop 0.9 percent, the 5th consecutive monthly
decline, Statistics Canada's industrial merchandise terms index
showed. Economists predicted a 0.4 percentage decline, the median
of 20 estimations in a Bloomberg News survey.

Canada's dollar is the best performing artist this twelvemonth versus the
16 most-actively traded currencies. It have gained 22.4 percent
versus its U.S. opposite number in 2007. The Canadian dollar reached
parity with the U.S. dollar on Sept. Twenty for the first clip since

''It'll be difficult to name a top for the mass meeting in the Canadian
dollar,'' said Christian Dupont, a senior currency bargainer at
Societe Generale Sturmarbeiteilung in Montreal. ''The currency's demand is tied
to fiscal inflows, the U.S. dollar weakness, and the
commodity boom. As long as these factors are in play, you can't
predict how far this mass meeting can go.''

Export Slowing

Canada's currency will likely fall to $1 by the end of this
year, according to the median value prognosis of 39 economic experts surveyed
by Bloomberg News. Foreign exchange analysts nail down a possible
decline to a deceleration exportation sector. Depository Financial Institution of Canada Governor
David Contrivance said on Oct. Twenty-Two that the currency's ascent have been
''abnormally quick,'' and it will decelerate the Canadian economic system in

Canadian exportation growing will decelerate adjacent twelvemonth as a slumping
U.S. economic system chills demand for the country's products, Canada's
export-finance arm said today.

The value of commodity and services exportations from the world's
eighth-biggest economic system will turn 1.5 percentage next year, after
increasing 3.7 percentage in 2007, Sir Leslie Stephen Poloz, main economist
at Export Development Canada, said in a conference call.

The Canadian dollar should weaken to below 90 U.S. cents by
the end of adjacent twelvemonth as human race oil terms fall, the exportation agency

Petroleum Oil Prices

Petroleum oil terms have got increased 74 percentage after reaching a
low for the twelvemonth of $49.90 per gun barrel on Jan. 18. Oil declined 3
percent to $90.33 per gun gun barrel today after Emma Goldman Sachs Group
Inc., the depository financial institution that said in July oil may attain $95 a barrel,
told clients it's ''time to take profits.''

The currency remained higher after Canadian Finance
Minister Jim Flaherty announced C$60 billion ($63 billion) in
tax cuts over the adjacent five years, after billowy oil terms and
record corporate net income led to higher-than-expected revenue

The commodity and services taxation will be lowered to 5 percent
from 6 percent, effectual Jan. 1, Flaherty said today in Ottawa
in his semi-annual financial update. The authorities also will lower
the country's corporate-income taxation charge per unit to 19.5 per centum next
year -- one percentage point more than planned.

The authorities will still have got adequate money to post a
surplus of C$11.6 billion in the financial twelvemonth ending adjacent March,
with C$10 billion of that gravy going to pay down debt,
Flaherty said.

The output on Canada's benchmark 4 percentage chemical bond owed June
2017 was small changed at 4.26 percent. The price, which moves
inversely to yield, rose 6 cents to C$97.93.

To reach the newsman on this story:
Haris Anwar in Toronto at

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