The main driver of today's action as a whole was not the Canadian inflation report. It was the (net capital flows) data, which served to alleviate fears that the U.S. won't be able to fund its current account deficit.

The market remains very bullish on the Canadian dollar and is happy to buy it when they have a reason to, but they don't really want to sell it, despite what they're being told by the market.

An announcement of a merger or acquisition can definitely lend short-term support.

You can see that dollar/Canada's had trouble going below C$1.15. I think that's a reflection of the fact that the statement was somewhat less hawkish, and traders are less sure about the course of monetary tightening in Canada.

The U.K. is an eye-grabber. These are petrodollars coming from the OPEC countries through intermediaries in London. Petrodollars continue to be very sensitive to interest rate differentials.

I don't think they'll refer to Katrina in terms of its direct impact on the Canadian economy, but perhaps its impact on higher oil,

Canada's trade balance tends to attract less attention given that it's in pretty healthy shape. But going into the (U.S.) trade balance, I imagine the market is positioned short dollars because it's forecast to widen. Risks are skewed towards a larger deficit.

If you look at the chart, C$1.17 has been a difficult level to break for a while.

The consumer is still alive and well despite softening of the housing market.

The irony is while we're driving more productivity and revenue by switching to broadband POS systems, we need to be far more careful about Internet vulnerabilities. It's a whole new ballgame building an IP network for hundreds of stores that needs to function even if a broadband connection is lost, and has to protect private customer and business information, not to mention facilitate the business of managing the entire network.