Forex Analytics of LiteForex of 01.11.10: CAD: Canadian Dollar needs a break after the rapid growth
At the Forex currency market the Canadian Dollar rate declined slightly on Monday following the last week growth.
Forex forecast: MACD indicator is in the negative area for the pair USD/CAD, however it goes up giving grounds for a pair buy signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: in case of breakdown at the level of 1.0170 the pair will go to 1.0210 and 1.0270.
It became known earlier that the Canadian economy resumed its growth –following the recession in July GDP in Canada increased by 0.3% in August which agreed with the forecast. Production sector provided support to the economy demonstrating recovery after the decline in summer. Oil and gas production also supported the country’s economy (+1.5%).
Industrial sector increased by 0.5% in August; growth in the retail sales sector amounted to 1.1%.
Economists warn however that it is too early to rejoice at the Canadian economy growth as the real GDP growth in QIII can only amount to 1.5%.
The Bank of Canada meeting was held a week earlier; it was decided at the meeting to keep interest rate unchanged at the level of 1% per annum. The last rate increase took place in September (+25 basis points). According to the regulator who left the interest rate unchanged despite market expectations while the world economy tries to recover after the crisis it is necessary to study carefully aspects to reduce incentives in the monetary policy. Bank of Canada also reported the downward forecast revision on the economic growth pace for this year –to 2.3% against the level of 2.9%; apparently it is impacted by the neighborhood with the USA where the economic situation remains difficult.
The Bank of Canada made quite aggressive statement recently. Thus, the head of the Bank Mr. Carney noted that activity in the consumption sector in Canada will slow down and economic growth of the country will become more moderate. The Bank of Canada will only commence currency intervention in the event of extreme situation in the market, if economy will be under threat.
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