CAD: Canadian Dollar continues to retreat

At the Forex currency market the Canadian Dollar rate continues to retreat in pairing with the USD.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and is going upward, giving a pair buy signal. Stochastic Oscillator declines in the neutral zone today, giving an antipodal signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9635 the pair will go to 0.9650 and 0.9670.If the level of 0.9600 is exceeded, the level of 0.9580 will become the target for sale..

It became known yesterday that trade balance surplus in Canada rose to $627 billion in March against the level of $356 billion in February. In addition, exports increased by 3.5% in March; imports by 2.8%. Canadian economy declined unexpectedly in February: GDP fell by 0.2% in February against the growth by 0.5% in January. It was largely caused by the reduction in the industrial output.

As it became public earlier retail sales in Canada increased by 0.4% in February against the fall by 0.4% in January. In addition, index of leading indicators in Canada increased by 0.8% in March against 0.8% m/m earlier and wholesales sale fell by 0.6% in February against 1.5% m/m in January.

In regards to the Canadian Dollar rate, IMF believes that if average oil price will remain at about $90 barrels (in October- $79 barrels) CAD will increase, with the help of support from the commodity sector of the country’s economy.

Imperial Bank of Commerce reported earlier on the revision of its GDP forecast for QIV 2010 to 2.6% versus the previous level of 2.3%; the Bank expects that this year economic growth will be by 2.6% (2.4 % previously).

The Bank of Canada stated earlier that CPI in the country will begin to rise, as soon as it exceeds expected level. At the same time value of key index of net CPI is also growing, remaining close to the target level of 2%.

The regulator expects that average growth of GDP in Canada will be at the level of 2.9% per annum this year. According to the experts from International Monetary Fund, Canadian economy will grow by 2.3% y/y this year, which is less than the forecast of +2.7% y/y in October.

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