Forex Analytics from LiteForex of 10.11.10: CAD: Canadian Dollar is regaining its positions steadily

The Canadian Dollar rate goes up at the Forex currency market after the previous fall.

Forex forecast: MACD indicator is in the positive area for the pair USD/CAD, however it goes down, giving grounds for a pair sell signal. Stochastic oscillator is giving a similar signal, being in the neutral zone.

Forex recommendations: traders’ targets today will be the levels of 1.0020 and 0.9970.

The head of the Bank of Canada Mr. Carney noted yesterday that economy needs regulation system reforms as the risk of the financial institutions collapse “which are too large to become bankrupt” is still too high at the moment.

He also stressed that the banks themselves should comply with market discipline and currencies’ rates should reflect the fundamentals. According to Carney increasing tension at the currency market bear   risks for Canada itself.

The politician emphasized that the CB of Canada will continues to implement the existing monetary policy.

We would remind that at the last meeting the Bank of Canada decided to maintain interest rate unchanged at the level of 1% per annum. The last increase took place in September (+25 basis points). According to the regulator who left the rate unchanged despite market’s expectations, while world economy tries to recover after the crisis, it is necessary to study carefully incentives reduction aspects in the monetary policy. Central Bank of Canada also reported this week on the downward revision of the economic growth rate forecast for this year to 2.3% against the previous level of 2.9% - apparently neighborhood with the USA where the economic situation remains difficult, has its negative impact. The Bank of Canada made quite aggressive statements. Thus, the head of the bank Carney noted that activity in the consumption sector in Canada will slow down and economic growth will become more moderate.

The Bank of Canada will start intervention only in case of extreme situation at the market when the economy will be in jeopardy.

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