CAD: Canadian Dollar remains in the range

At the Forex currency market the Canadian Dollar rate is going down slightly on Tuesday, however still remaining in the four days range of 0.9907-0.9990.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however is going up, giving a pair buy signal. Stochastic Oscillator is giving an antipodal signal today, being in the neutral zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9965 the pair will go to 0.9980 and 1.0010. If the level of 0.9930 is exceeded, traders’ targets will be the levels of 0.9890 and 0.9850.

According to the experts from the International Monetary Fund, Canadian economy will be growing by 2.3% y/y in the current year, which became a downgrade compared with the forecast of October (+2.7% y/y).

At the same time IMF expects that in 2012 Canadian economy will increase by 2.7%. The exact figures of the GDP growth in the country will be published on 28 February but meanwhile IMF supposes that the indicator will be at the level of 2.9% (earlier – 3%).

As for the exchange rate of the Canadian Dollar in the current year, IMF believes that in case if average prices for the oil will be maintained at about 90 dollars for the barrel (in October- $79 per barrel), the CAD will consolidate supported with the help of fundamental support provided by the commodity economy of the country.

We would remind that at the meeting of Bank of Canada this week, the regulator decided to keep interest rate unchanged, at the level of 1%. Given the non-uniform statistical data on the nearest neighboring country, the USA, a step is perfectly logical.

The follow-up comments of the regulator have been predictable. The head of the Bank Mr. Carney noted that high rate of the CAD is holding back exports in the country, although the levels of net export will be maintained amid demand for raw materials. In addition, the Bank of Canada said that the fact of tightening of the monetary policy in the developing countries will affect the price movement; and that self-recovery of the world economy progresses slightly faster than than it had been predicted although risks also increase. As for the inflation levels, regulator expects that level of core and general indices of consumer prices will be below 2% level by the end of 1012.

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