CAD: Canadian Dollar has a chance to regain from sales

At the Forex currency market the Canadian Dollar rate goes up today because of quiet external background and lack of activity at the trading floors.

Forex forecast: MACD indicator for the pair USD/CAD has broken through the signal line from bottom to top and is traded in the positive area, giving a buy signal. Stochastic Oscillator remains in the overbought zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0460, the pair will go to 1.0470 and 1.0490.

If upward breakdown does not take place, the pair will remain at the current levels. As part of correction the pair can go to 1.0380.

Earlier the head of the Bank of Canada Mr. Carney said that the regulator will maintain the rate at the level of 1% under the influence of the European developments. He believes that situation with European debt has deteriorated prospects of the global economy and spread panic in the financial markets. Taking into account the foregoing it is obvious that the program of providing help to the banks will be continued.

It became known at the end of last week that CPI increased by 0.2% (+2.9% y/y) in October against the forecast of growth of 0.1% (+2.7% y/y) The index was below the previous level of 3.1% y/y but remained within the range of 1-3% designated by the Bank of Canada. Last month, prices in Canada increased mostly for gasoline and food.

The Bank of Canada believes that country’s GDP will amount to 2.8% in 2011 (decline by 0.1% against the forecast in April), in 2012 it will be: 2.6% and in 2013: 2.1%.  According to the Bank, export performance in Canada is weak, because low demand in the U.S. impedes progress in the index and expensive CAD also offers a challenge. The rise in the interest rate in Canada will directly depend on stability in economic growth.

Unemployment rate increased by 0.2% in October,  up to the level of 7.3% versus the level of 7.1% in September.  Full employment reduced by 71.7 thousand, part- time employment increased by   17.7 thousand. Overall rate of employment in Canada fell by 54 thousand last month against the growth of 60.9 thousand in September.  After the release of this statistics representative of the Bank of Canada Harper noted that employment statistics fully reflects low confidence both in Canada and in the world; however labour sector is very volatile. According to information received earlier, Canadian companies are going to continue effective work in the future, by increasing volume of investments and creating new jobs; however not as fast as it had been announced earlier. The forecast for sales in 2012 has been lowered in the country; as a result, local producers had to temper their personal forecasts. According to the estimates of the Bank of Canada, sentiment of the leaders of the large companies fell down compared with the summer period, since top management expects the decrease in the U.S. GDP and conservation of uncertainty in respect to global economic outlooks.