Archived IMT (2009.05.29)

USDCAD remains on course for the preliminary target of 1.08, a break of which to clear the way for 1.03. CAD has largely gained on the 110% rally in oil prices from their low. The pace of the decline in USDCAD from 1.30 to 1.10 in 13 weeks was rapid, but as rapid as the rise from the 1.0580 low in October to the 1.3020 high in October, which lasted only 4 weeks. The sharp market deleveraging has dealt a sharp blow to CAD but the broadening USD damage and stock market stabilization have boosted the currency due to its improved correlation with equity indices. AUDCAD continues to consolidate around 0.8770s for the 11th straight week, coinciding with the 61.8% retracement of the decline from the 0.9843 high to the 0.7177 low. Dow futures +54 pts.