Oil continued to push lower in the London session as Hurricane Gustav quickly becomes a distant memory. The commodity slipped from an open near $111.20 towards a session low of $105.46 before closing just under the $108.00 mark. This helped the buck extend gains against the majors in a big way.
EUR/USD fell about 85 pips towards a close near 1.4495 after making a session low around 1.4465. GBP/USD lost about 100 pips in London trading and was sitting near 1.7820 at the close. The OECD revised its forecast for UK growth in 2008 to just 1.2% from a prior estimate of 1.8% and this helped push Sterling lower as well.
USD/CAD extended gains on the sharp leg-down in oil prices. Loonie opened near 1.0685 and was sitting just above 1.0700 at the close after making a high near 1.0750 as oil was making its lows. We expect the pair to encounter good resistance once again near the 1.0720/25 area where a daily trendline lurks.
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