CAD: Canadian Dollar managed to be corrected

At the Forex currency market the Canadian Dollar rate continues to be corrected on Tuesday after the previous sales. The situation with the CAD is very interesting because commodity currency has grown yesterday and is growing today despite external negative factors.

Forex forecast: MACD indicator is in the positive area for the pair USD/CAD; however it is moving along the signal line and is not giving a clear signal. Stochastic Oscillator is also moving along the signal line in the neutral zone, and is giving a clear signal.

Forex recommendations: off the market. Feasible event scenario at Forex: in case of breakdown at the level of 0.9920, the pair will go 0.9900 and 0.98701.

If downward breakdown does not take place, the pair will stay at the current levels.The pair failed to maintain parity, because support from oil has interfered.The CAD hardly receives any support from macro-statistics which demonstrates mixed data. It became known earlier that unemployment rate in Canada increased to 7.3% in August against the forecast of 7.2% and previous level of 7.2%.

In addition, labour productivity fell by 0.9% on quarterly basis in Q2 against the forecast of decline by 0.7% q/q. It also became known that number of begun construction in Canada fell to 184.7 thousand in August against the forecast at 200 thousand. Slowdown in the key indicators, which is obvious at the moment, was caused by the state of the global economy and proximity to the Unites States.

The Bank of Canada believes that GDP of the country will amount to about 2.8% in 2011 (reduction by 0.1% versus forecast of April); in 2012 it will be 2.6% and 2.1% in 2013. According to the evaluation of the Bank, exports performance in Canada is negative because low demand in the USA prevents the rise of the indicator and expensive CAD makes situation even more complicated. The growth in the interest rate in Canada will directly depend on stability in economic development.

The head of the Bank of Canada Mr. Carney said earlier that there are several significant obstacles on the way of Canadian economic development. First of all it is the growth of the Canadian Dollar and secondly, it is European debt crisis, plus to this, drawn-out dialogue about the U.S. national debt also casts a dark shade on the Canadian economy.

Central Bank will be able to waive further economic stimulation only when economic system will show steady self-sustained growth.As it became known earlier, number of begun construction in Canada increased to 205.1 thousand in July, which is higher than the forecast of 194.5 thousand and above the previous level of 196.6 thousand.

In addition, trade deficit in Canada was at the level of -$1.6 billion in June against the level of -$1 billion in May, which is probably related to the problems in the neighboring U.S.We should not disregard the fact that net CPI in Canada increased by 0.2% m/m (+1.6% y/y) in July. The indicator fell by 0.7% m/m (+3.1% y/y) in June.

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