Forex Analytics of LiteForex 12.11.10: CAD: canadian dollar continues to grow weak

The Canadian Dollar rate decreases at the Forex Currency market today without oil prices support.

Forex forecast: MACD indicator is in the positive area for the pair USD/CAD

and it goes up, confirming yesterday's buy signal for the pair. Stochastic Oscillator is giving a similar signal today, being in the overbought zone.
Forex recommendations: in case of breakdown at the level of 1.0135 and if the current market trend is maintained, buyers of the pair will have targets
of 0160 and 1.0190.

The pair, after being in the narrow range of 0.9980-1.0080 for over a week, has made a breakdown up at last and this prospect will be maintained in a
short run. In addition investors' anxiety is explained by the new surge of talk about debt problems in the peripheral countries of the Eurozone -
yesterday Spain gave a handle to this and later- Ireland. The head of the Bank of Canada Mr. Carney noted earlier 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 continue 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.

 

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