CAD weakened markedly following the Bank of Canada announcement lastweek, with the Bank dropped their long-held tightening bias. This meant ourexpectation prior to the announcement of a muted response was clearlyincorrect. However CAD now looks fairly priced on against AUD and NZD, and alittle cheap against USD. With Canadian rates already pricing a tepid USeconomic recovery we would then be wary of chasing CAD weakness here.
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