Bank of Canada Policy Preview

Forex News: 23:09:21 GMT: Forex Research - Softer Inflationary Pressures Fail to Stifle the Dollar's Gains 22:14:53 GMT: FX Research - Morning Report 21:44:19 GMT: Forex Market News - Canadian dollar falls with oil prices, bonds mixed 20:56:13 GMT: Chart of the Day - 5/14/2008 - GBP/USD 20:34:18 GMT: FOREX News-Yen falls broadly after tame CPI data, stocks rise 20:13:35 GMT: FX Blog- Market Snapshot Far East Open for 15 May 2008 ...READ ABOUT THE GVI Gold (Pro) NO COST OPTION........Check out Global-view's Learning Center.......SPECIAL OFFER!... Thomson TFN FOREX NEWS only $300/yr via Paypal....... FX-Strategy- automated entry and exit signals.... CLICK HERE....Career Builders Job Directory CLICK HERE.... Max McKegg's Currency Trading Signal Service CLICK FOR DETAILS....Forex Job Opportunity!... CLICK for Details>... WebTicker by Mioplanet www.mioplanet.com

GVI Dollar Outlook

CANADA

GVI Bank of Canada Policy Meeting Preview

Decision: June 10 at 14:00 GMT.

BOC Overnight Target Rate: 3.00%

Expected Decision: Odds favor another -25bp rate cut. The latest policy statement and BOC comments suggest that further cuts are in the pipeline.

There are concerns that the Canadian economy could be negatively impacted by the global economic slowdown and the high level of the Canadian currency. Note below that both the Ivey Manufacturng PMI might have started to weaken. BOC core inflation is below bank estimates. The high level of the Canadian currency. Short-term credit markets anticipate a few additional rate cuts.

BANK OF CANADA Policy Objective: The Bank of Canada aims to keep inflation at the 2 per cent target, the midpoint of the 1 to 3 per cent inflation-control target range. This target is expressed in terms of total CPI inflation, but the Bank uses a measure of core inflation as an operational guide. Core inflation provides a better measure of the underlying trend of inflation and tends to be a better predictor of future changes in the total CPI.

cacpi

The chart above shows year/year CPI-X (core CPI) and the target of 2% for this price index.

The chart above shows the current three month Banker Acceptance rate, the current BOC overnight rate target and where the futures markets are currently trading three month rates for the specified periods in the future. The chart also includes comparisons of where these futures rates were trading most recently, a week ago and four weeks ago. The chart provides a view on where the markets feel Canadian interest rates are headed.

The chart above shows the Canadian overnight rate target, three month Bankers Acceptance, and two- and ten-year bond yields over the past twelve months.

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.