CAD: Canadian Dollar did not cease subsidence

At the Forex currency market the Canadian Dollar rate continues to weaken on Friday.

Forex forecast: MACD indicator is in the positive area for the pair USD/CAD and is moving along the signal line, not giving a clear signal. Stochastic Oscillator began barely noticeable reversal in the neutral zone, shaping a sell signal.

Forex recommendations: in case of breakdown at the level of 0.9850, the pair will go to 0.9870 ? 0.9890. If upward breakdown does not take place, the pair will consolidate close to the current levels.

Canadian Minister of Finance Mr. Flaherty stressed the need of the speedy recovery of the European economy, since it affects the level of investor confidence. Speaking about national economy Flaherty said that Canada can serve as an example for other countries citing as an example statistics of IMF which states that by 2016 Canada will become one of two countries of the Big Seven, which is projected to have a balanced budget.

According to the plan of the Finance Ministry of Canada presented earlier, the country shall revert to the budget surplus in 2014.

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.

It became known earlier that balance of current account in Canada was at the level of –CAD $8.92   billion in QI against the level of CAD$10.28 billion in QIV last year. In addition, real GDP of basic prices increased by 0.3% (+2.8% y/y) in QI against revised level of -0.1 % m/m in February.

Inflation in Canada increased by 3.3% y/y, and 0.3% m/m in April against the forecast of 3.4% y/y and 0.5% m/m; while energy costs rose by 17.1% y/y, as per the estimates of the Canadian Statistics Service.

Note: GDP increased by 1.0% on quarterly basis (+3.9% y/y) in QI against the rise of 0.8% a quarter earlier.

At the beginning of June the Bank of Canada left the interest rate unchanged at the level of 1.00% per annum which agreed with market expectations. The regulator said in the follow-up comments that minimization in incentives shall be thoroughly considered, although eventually all the incentives will be phased out. According to the Bank of Canada, core inflation remains relatively low and economy is active, as expected. At the same time expensive Canadian Dollar may well become a break on national economic growth and provide a restraining effect on inflation.

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