CAD: Canadian Dollar tends to rise after yesterday’ correction

The Canadian Dollar rate demonstrates slight increase at the Forex currency market on Wednesday after yesterday’s drawdown in advance of the meeting of the Bank of Canada and follow –up comments of the regulator.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and continues to go down, confirming a previous sell signal for the pair. 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 0.9900 the pair will go to 0.9870 and 0.9840. If the level of 0.9930 is exceeded, buyers’ targets will be the levels of 0.9950 and 0.9980.

At the meeting yesterday the Bank of Canada decided to leave the interest rate unchanged at the level of 1%.
In the follow -up comments regulator stated 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 the 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.
Statistics on the employment rate in Canada released last week was a positive factor for the CAD. 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 previous level of 7.6% (forecast was 7.7%) in December which has become the lows since January 2009.

In general, the CAD seems the most stable among high-yielding currencies even taking into account its close proximity to the USA. Most likely the short term growth of the Canadian currency will be continued due to the steady state of the local economy.

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