CAD: The year started very successfully for Canadian Dollar

At the Forex currency market the Canadian Dollar rate is going up on Monday starting the day at the highs of the many weeks.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and continues to go down giving a pair sell signal. Stochastic Oscillator remains in the oversold zone.

Forex recommendations: if traders’ bearish sentiments will maintain for the pair USD/CAD, traders’ targets will be the levels of 0.9930 and 0.9900. If downward breakdown will not take place the pair will consolidate close to the current levels.

We should keep in mind that the market is thin and volatility of trades is high.

Basis consumer prices index in Canada remained unchanged in November after the growth by 0.4% in October, the growth has slowed down to 1.4% on annual basis against the previous level of 1.8%.

Therefore, inflation demonstrated minimal increase last month for over then 2 years. It became an indicator for the Bank of Canada that interest rates will remain unchanged for quite a long time.

According to Flaherty, Finance Minister of Canada, budget for 2011 will contain measures to support economic growth of the country, with significant spending on infrastructure, education and retraining programs, which will become nearly the main items. Flaherty also thinks that there is no need to extend economic incentives program at the moment; however its reduction is not provided for either, as economic upturn is required in the country.
Interest rate in Canada is at the level of 1% per annum. The last increase which took place in September this year was by +25 basis points. There is an opinion at the market now that the Bank of Canada will not change the interest rate until QII next year as economic recovery rate has slowed down in the country. The rate was increased 3 times in a row this year and at the last meeting of 19 October the regulator decided not to change it again.
Schedule of the Bank of Canada meetings for 2011 is as follows: 18 January, 1 March, 12 April, 31 may, 19 July, 7 September, 25 October, 6 December.

 

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