Forex analytics of LiteForex of 22.10.2010: CAD: Canadian dollar is slowly strengthening today

On Friday in the currency market (forex) CAD is slightly increasing after a slump earlier which could be considered as a technical rebound. The pair is within the range of 1,0161-1,0350.

The bidding will be in the range in the short term; a similar situation will be in the medium term.

Possible scenarios: if the level of 1.0300 is broken the pair will go to 1.0380 and then to 1.0510. If the level of 1.0165 is broken then the targets of the USD / CAD sellers will be the level of 0.9930.

On Friday Canadian Finance Minister Mr. Flaherty has noted that the current account balance is an objective indicator for the achievement of strong growth foundation by the G20 countries.

Thus Canada is at one with the U.S. in establishing a plan of actions in order to stop the countries from the control of their own currencies. However Flaherty himself is not sure whether at the G20 summit in South Korea he can arrange for the introduction of quantitative measures of the economy.
This week a meeting of the Bank of Canada took place. At the meeting it was decided to keep interest rates unchanged at 1% per annum. The previous increase was in September (+25 basis points). According to the regulator who left the rates unchanged against market expectations - while the global economy tries to recover after the crisis it is necessary to examine carefully the aspects of reduction of the incentives in monetary policy.

The Bank of Canada has also reported this week that the forecast of economic growth paces was reviewed downwardly to 2.3% from the previous level of 2.9%. It looks like it is the result of the neighborhood with the USA where the economic situation remains difficult.

The situation in the U.S. continues to affect Canadian economy which increases some risks for the national economy.

[More]