CAD: Canadian Dollar weakens amid reduction in investors’ interest in risk

At the Forex currency market the Canadian Dollar rate is traded downward on Monday because investors continue to leave high-risk positions.

Forex forecast: MACD indicator for the pair USD/CAD has broken through the signal line from top to bottom, giving a pair buy signal. Stochastic Oscillator increases in the neutral zone, giving a pair buy signal.

Forex recommendations: in case of breakdown at the level of 0.9785, traders’ target will be the levels of 0.9800 and 0.9590. If upward breakdown does not take place, the pair will consolidate close to the current levels.

Inflation in Canada increased by 3.3% y/y, 0.3% m/m in April against the forecast of 3.4% y/y and 0.5% m/m; while energy costs rose by 17.1% y/y, as per the estimates of the Canadian Statistics Service.

According to the head of the Bank of Canada Mr. Carney inflation shall exceed the level of 3% in the current Quarter due to which the issue of raising rates will be “get a lot of scrutiny”. He 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 a 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.

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.

It became known earlier that retail sales in Canada rose by 0.4% in February against the fall by 0.4% in January. In addition, the index of leading indicators in Canada increased by 0.8% in March versus 0.8% m/m earlier and wholesale sales declined by 0.6% in February against 1.5% m/m in January.

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).

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 has become the 7th fact that gives an incentive for the rise in the indicator

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

 

 

 

 
 

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