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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Friday, June 3, 2011

May 2011 Currency Exchange Rates

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The U.S. dollar gained ground against Canada’s “loonie” (1.0 percent) and the euro (0.9 percent) but deppreciated against the yen (2.5 percent). On a trade-weighted index basis, the dollar was unchanged against a basket of 26 currencies.
 
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Canada: The loonie weakened against the dollar despite real GDP growth of 0.3 percent in March and strong Asian demand for Canada’s oil, lumber and potash. Some analysts speculate the loonie’s depreciation stemmed from expectations the Bank of Canada will hold off raising interest rates until September, instead of in July as previously expected.

Europe: The euro “yo-yo’d” against the dollar in May, as expectations of strong Asian demand for European “bail-out” bonds competed with Europe’s sovereign debt crises -- which are also threatening Eastern Europe’s economic recovery -- and souring confidence among German investors because of rising energy prices.

Japan: The yen apparently strengthened on account of the economy’s fairly robust bounce back from the mid-March earthquake and tsunami. Industrial output rose 1 percent in April following a record plunge immediately after the disaster, and companies said they planned to crank up output further in May and June. Japan’s economy remains in a “very severe” state, however, and has a long way to go back to full recovery -- evidenced by a rising jobless rate, plunging auto exports, and warnings by Moody's ratings agency that both growth and government action may fall short of what is necessary to bring Tokyo's ballooning debt back under control.

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