CAD: Canadian Dollar continues to grow

At the Forex currency market the Canadian Dollar rate continues to grow steadily.
Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and it continues to go down, giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal today.

Forex recommendations: in case of breakdown at the level of 1.0125 traders’ targets will be the level of 1.0080 and 1.050.
The situation is Canada is stable. Revised GDP data for QII was published this week: (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.

Stocks at warehouses in Canada amounted to 17.52 billion CAD in QIII.

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.

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