CAD to Remain Strong as Driven by Robust Domestic Growth Our optimism on Canadian dollar's long-term outlook hinges on the country's strong domestic growth and healthy fiscal conditions. Despite the fact that risk-sensitive assets (including CAD) have been cold-shouldered over the past 2 months as sovereign woes in the Eurozone -and worries over a 'double-dip' recession triggered demand for safe-haven, the actual impact on Canada's economy should be small. Instead, robust domestic demand, consistent increase in payrolls and sound fiscal conditions (having the lowest deficits as a % of GDP among the G7) should support the country's growth and warrant further tightening by the BOC for the rest of the year. Full Report Here... The Fed Downgraded Growth Forecasts, But The Overall Tone Not Too Pessimistic The June FOMC minutes unveiled that policymakers downgraded economic forecasts for 2010 slightly as a number of members saw the risks to the outlook as having shifted to the downside. The tone of the minutes was dovish but it was largely expected as the Fed released the meeting statement on June 23. The Fed did not discuss much about exiting stimulus but the changes to the outlook were 'viewed as relatively modest and as not warranting policy accommodation beyond that already in place'. Full Report Here... SNB to Resume Intervention Soon Swiss franc surged against the euro and the dollar by -7.22% and -6.37% respectively in June with the rallies accelerated after SNB's meeting on June 17. The central bank raised its inflation forecasts and stated that the deflationary risk in Switzerland has largely disappeared. At the same time, the SNB did not reiterate the stance to 'act decisively to prevent an excessive appreciation of the Swiss franc against the euro' although the franc has strengthened +8% against the euro over the past 6 months. This indicated the SNB's increased tolerance to the decline of EURCHF. Full Report Here... | 
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