A combination of factors pushed the U.S. dollar higher Wednesday morning.

On Tuesday, Bank of Canada Governor David Dodge faced the media to clarify his economic outlook for the nation. "The economy is performing as expected. The Canadian economy is strong, but not overheating." Mr. Dodge remarked that the rising cost of wages, energy and the dollar are only some of the pieces making up an economy that has become flexible and adaptable to changing conditions. His statement seems to indicate that the central bank may indeed be nearing the end of a cycle of steady rate hikes which began in September of 2005. Increasing oil inventories in the U.S. have continued to drive the price of crude down while at the same time helping to boost the U.S. dollar. Reports issued on Tuesday indicating that inflation could be a problem for the U.S. economy may also have helped to boost the U.S. dollar today.

Trading in Japan resumed Wednesday after markets were closed on Tuesday to observe the National holiday of shunbun no hi (Spring Equinox Day). At 11 a.m. the U.S. dollar was trading at 1.1660 against the Canadian dollar.

The U.K. pound was trading higher Wednesday morning. "It is estimated that the U.K. economy will expand by more than 2.5 per cent in 2006," said Gordon Brown on Wednesday. Mr. Brown is Britain's Chancellor of the Exchequer, the cabinet minister responsible for all British financial matters. Brown is in control Her Majesty's Treasury and plays a role similar to that of Minister for Finance (Canada) or Secretary of the Treasury (United States). In his annual budget statement to Parliament, Mr. Brown predicted further growth of 3.25 per cent in 2007 and 2008. This is in stark contrast to 2005 when the British economy suffered its poorest economic growth since the recession in 1992. At 11 a.m. the U.K. pound was trading at 2.0376 against the Canadian dollar.

Market Report prepared by Bruce Hauser, Chief of Operations

Accu-Rate Corp.

Tel: (613) 596-0612

E-mail: bruce@accu-rate.ca