CAD: Canadian Dollar moves away from local peaks

At the Forex currency market the Canadian Dollar rate decreases in pairing with the USD on Monday amid investors’ interest in the latter.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and is moving along the signal line, not giving a clear signal. Stochastic Oscillator has come into oversold zone today, giving a pair sell signal.

Forex recommendations: correctional movement can lead a pair to 0.9500 ? 0.9520. However if upward breakdown does not take place the pair will continue to be traded close to the current levels.

As the data released on Friday showed, Canadian economy unexpectedly decreased in February: GDP fell by 0.2% in February against the growth by 0.5% in January largely due to the decline in the level of industrial output. 

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%.

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.

It became known earlier that 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.

As for the rate of the Canadian Dollar, 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 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). 

 

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