The Canadian currency traded higher against its U.S. and Japanese counterparts during today's early trading. The loonie reached 105.04 against the yen and 1.0171 against the dollar, compared to yesterday's closing values of 104.89 and 1.0182 respectively.

No major economic reports from the U.S. are scheduled today as the markets are closed for the Independence Day holiday.

The Canadian dollar has been the weakest of the world's major currencies against the U.S. dollar during the past five days, declining one per cent despite the continued strength in oil, gas and other commodities. The loonie continues to be trading in a narrow range relative to the U.S. dollar as strategists look at the actual volumes of exports rather than values which are up due to strength of the Canadian dollar.

During the past three months, the correlation between the Canadian dollar and oil has been 0.16 per cent, while the correlation with the Commodity Research Bureau's index, which was up 20 per cent during the second quarter – the greatest rise in 35 years – was 0.18 per cent.

Although the economic calendar is very light, Canada will be releasing what can typically be a very market-moving indicator for the Canadian dollar – the Ivey Purchasing Managers Index (PMI). The Ivey PMI report measures the country's manufacturing activity, which tends to be a strong leading indicator for growth. A strong Ivey PMI report would indicate that the Canadian economy is more resilient than the market is currently reflecting, which could move the loonie higher.

By 11 a.m. the Canadian dollar was trading lower against the U.S. dollar at 0.9840.

Market report prepared by Robert Lee

Accu-Rate Corp.

2573 Carling Ave. Ottawa, ON K2B 7H7

Tel: 613-596-5505 ext. 706

E-mail: robert@accu-rate.ca