CAD: Canadian Dollar began to grow
The Canadian Dollar rate is going up at the Forex currency market on Tuesday amid positive external background and two years’ highs of oil; currency is in demand at the market.
Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and it goes down, giving grounds for a pair sell signal. Stochastic oscillator is giving a similar signal.
Forex recommendations: in case of breakdown at the level of 0.9989 the pair will go to 0.9920 and further to 0.9810.
It became known yesterday that unemployment rate in Canada declined to 7.6% (-0.3%) in November. Employment rate increased by 15.2 thousand; It became a positive signal for the currency.
Interest rate in Canada is at the level of 1% per annum. The last increase took place in September this year was by +25 basis points. There is an opinion at the market that the Bank of Canada will not change the interest rate until QII next year, as economic recovery rate slows down in the country. The rate was increased 3 times in a row this year and at the last meeting of 19 October the regulator decided not to change it again.
Close proximity to the USA with functioning QE2 is unlikely to bring positive factor to Canada. Therefore, it is too early to speak about the rate growth. It is possible that while policy of easing is being conducted in America, Canadian rate will remain unchanged.
The head of the Bank of Canada Mr. Carney noted earlier that economy needs regulation system reforms, as the risk of collapse of the financial institutions “which are too large to become bankrupt”’ is still too high at the moment.
He also stressed that the banks themselves should comply with market discipline and currencies rates should reflect the fundamentals. According to Carney increasing tension at the currency market bears risks for Canada itself.
A week earlier revised GDP data for QII was published: (2.3% against the 2.0% previously); at the same time exports fell by 1.3% in QIII against the growth by 1.4% in QII.
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