CAD: Canadian Dollar is still strong despite correction

At the Forex currency market the Canadian Dollar rate is traded slightly downward at the Forex currency market on Thursday still being close to the local highs.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and continues to slide down, confirming a previous sell signal for the pair. Stochastic oscillator remains in the oversold zone and is not giving a signal.

Forex recommendations: if correctional ascending movement for the pair USD/CAD intensifies and the level of 0.9900 is exceeded, buyers’ targets will be the levels of 0.9930 and 0.9950. More distant correctional target is 0.9975. in this case descending trend is a medium term prospect for the pair.

As for the interest rate in the country Flaherty noted that it will not be low for ever. Interest rate in Canada is at the level of 1% per annum. The last increase which took place in September this year was by +25 basis points. There is an opinion at the market now that the Bank of Canada will not change the interest rate until QII next year as economic recovery rate has slowed down in the country. The rate was increased 3 times in a row in 2010 and at the last meeting of 19 October the regulator decided not to change it again. Schedule of the Bank of Canada meetings for 2011 is as follows: 18 January, 1 March, 12 April, 31 may, 19 July, 7 September, 25 October, 6 December.

Core index of consumer prices in Canada remained unchanged in November after the rise by 0.4% in October, the growth has slowed down to 1.4% on annual basis against the previous level of 1.8%.

Statistics on the employment rate in Canada released at the end of last week has inspired investors. Thus, number of jobs increased for the third time in a row in December, by 22 thousand, following the growth by 15.2 thousand in November. At the same time unemployment rate remained at the same level of 7.6% (forecast was 7.7%) in December which has become the lows since January 2009.