CAD: Canadian Dollar steadily gains in weight

At the Forex currency market the Canadian Dollar rate is traded upward on Friday, for the fourth consecutive day.

Forex forecast: MACD indicator for the pair USD/CAD has broken through the signal line from bottom to top, giving a pair buy signal. Stochastic Oscillator goes down in the neutral zone, giving a pair sell signal.Forex recommendations: in case of breakdown at the level of 0.9650, traders’ target will be the levels of 0.9610 ? 0.9590. If downward breakdown does not take place, the pair will consolidate close to the current levels.

It became known in the middle of the week that leading indicators index in Canada rose by 0.8% in April, which was above market’s expectations (+0.6%). The favorable data had became the 7th fact, that gave an incentive for the rise in the indicator

High levels of export along with the labor market continue to be the main supportive factor.

It became known earlier that trade balance surplus in Canada rose to $627 billion in March against the level of $356 billion in February. In addition, exports increased by 3.5% in March; imports by 2.8%. Canadian economy declined unexpectedly in February: GDP fell by 0.2% in February against the growth by 0.5% in January. It was largely caused by the reduction in the industrial output.Imperial Bank of Commerce reported earlier 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). 

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%.

In regards to the Canadian Dollar rate, IMF believes that if average oil price will remain at about $90 barrels (in October- $79 barrels) CAD will grow with the help of support from the commodity sector of the country’s economy.

The head of the Bank of Canada noted earlier that most countries of the Eurozone comply with the requirements prescribed by the G20; only the USA ignores them in large extent. At the same time, the size of the American deficit continues to be the matter of concern.

With respect to the Europe Carney noted that he is convinced that IMF should continue to implement the tasks aimed at resolving European crisis.

 

[More]