The Canadian dollar continued to advance against the greenback on Wednesday after the release of key U.S. fundamental data indicated that more rate cuts by the U.S. Federal Reserve may be in store.

According to the Bureau of Labor Statistics, U.S. productivity increased by 2.2 per cent in the first quarter, showing that corporate America is battening down the hatches. A decrease in productivity would indicate wage inflation, while an increase means wage deflation.

Reported U.S. crude inventory stocks were higher than expected today at 5.7 million barrels. Crude inventory levels affect the price of gasoline at the pumps, also a measure of inflation. The increase in crude stocks likely means a shift in demand to the downside for oil, which continued to trade well above US$120 per barrel in New York today.

As a sign that the U.S. housing crisis is far from over, the U.S. pending home sales index edged down a further one per cent in March as fewer contracts for new homes were signed.

Close to parity by 12 p.m. Wednesday the Canadian dollar was pushing higher against the U.S. dollar at 0.9978.

Market report prepared by Bruce Hauser

Accu-Rate Corporation

2573 Carling Ave. Ottawa, ON K2B 7H7

Tel: (613) 596-5505

E-mail: bruce@accu-rate.ca