So, despite the importance of yesterday's publications the basic currency pairs continued trade in quite narrow ranges which borders were designated since the middle of the last week.

We remind again that except for publication of results of meeting of Bank of Canada Governing Council yesterday among publications there were two significant releases - the survey of PPI data and also the publication of preliminary value of the index in Eurozone.

Let's notice that last two parameters, unlike results of BC meeting, were not surprise, having been at a level of economists’ forecasts. So, the index of the industrial prices in Europe (15) for January made +0.8 % for a month, +4.9 % for a year, at the forecast of +0.8 % for a month, +4.9 % for a year and the previous value of +0.1 % for a month, +4.3 % for a year.

And preliminary value of GDP index in Europe (13) for the fourth quarter 2007 also was at a level of economists’ forecasts. We remind that value of a parameter made +0.4 % for a quarter, +2.2 % for a year at the forecast of +0.4 % for a quarter, +2.3 % for a year, and the previous value of +0.8 % for a quarter, +2.7 % for a year.

Results of meeting of Bank of Canada Governing Council were unexpected that led to significant reaction of the market. We remind that BC made a decision to lower the overnight rate at once by 0.50 % up to a level of 3.50 %. As a result after the announcement of the decision of Bank of Canada the Canadian dollar was in sales against all basic currencies and the rate dollar/canadian grew at the American session and reached a level 0.9976. Thus a primary factor of sales became the statement of Bank of Canada, which, in experts’ opinion, assumes new reduction of rates in the near future.

The text of the final document was formed not just in less aggressive tonality, but also reflected anxiety of Governing Council members.  It was specified that "... deterioration of economic and financial conditions in the USA can render significant effect on world economy. These events assume that the important threats to prospects of economical growth of Canada, which were noted in January report, come true and, in some parts, are intensified".

Canadian economy is an economy, considerably orientated on needs of the US market, therefore that fact that the economy of the neighbor, being the basic consumer of the Canadian goods, will most likely test on itself stronger and long delay than it was expected earlier, forces Canadian Central Bank to take preventive measures.

We recommend to follow development of a situation in dollar/canadian pair as frequently it play a role of the original early indicator for forecasting prospects of dynamics in other basic pairs.

So, steady growth of dollar/canadian rate can become a signal to realization of buoyant correction in dollar/franc pair and also to continuation of a descending trend in raw currencies. While it is necessary to keep waiting position.