I think it's going to be fairly rangebound until we get through to
Wednesday at 1 o'clock when Mr. Greenspan speaks," said Bank of Montreal's
Egleton. "I think most people are going to take their cue out of that."
"I think there is now some talk, especially leading up to Mr. Greenspan's
testimony on Wednesday, that the U.S. may be prepared to lower rates, and I
think that's certainly supportive for the Canadian dollar," Egleton added.
Other market watchers pointed to speeches by U.S. President Bill Clinton and
Treasury Secetary Robert Rubin, who both said inflation is not an economic
threat, as reinforcing the perception that the U.S. is headed for an interest
rate reduction.
Remarks by Rubin later in the day, when he disavowed any attempt by the
White House to push Greenspan towards lower rates, were seen by some analysts
as undermining the market's belief in the probability of an impending Fed rate
cut.
A firmer tone in commodity prices and weaker U.S. dollar have also helped
the Canadian unit in recent sessions, Egleton said.
A sudden shift in the political fortunes of U.S. President Bill Clinton
could prove disruptive, but that's unlikely to happen in the next few days, he
suggested. |
