The U.S. dollar kept on dropping this morning and by 11:00 a.m. it was trading at 1.1375 against the Canadian dollar. U.S. President George W. Bush mentioned yesterday that he is going to keep his options open to keep Iran from developing nuclear weapons. His comments have shaken the confidence of foreign investors on the prospects of the U.S. economy and the country's political stability and boosted the appeal of gold. ``The gold price is driven by persisting inflation concerns and political reasons, such as the nuclear conflict with Iran,'' said Eugen Weinberg, an analyst at DZ Bank AG in Frankfurt. International investors are mostly attracted to commodities these days to hedge against the instability of major currencies. In fact, spot gold reached $ 626.90 an ounce today and yesterday the crude oil price advanced to $ 71.60 a barrel.

By 11:00 a.m. Wednesday morning the euro was trading at 1.4025 against the Canadian dollar. Investors are expecting that the European Central Bank (ECB) will further increase its interest rates at least three times before the end of the year. It is also projected that the Euro zone economy will grow 2 percent this year compared to 1.3 percent in 2005.

Market Report prepared by Hanane Chouchane, Customer Service Representative,

Accu-Rate Corporation

2573 Carling Ave. Ottawa, ON K2B 7H7

Tel: (613) 596-0612

E-mail: hanane@accu-rate.ca