Forex Blog
Blog-FX.Com

At the Forex currency market the Canadian Dollar rate is getting slightly weaker on Tuesday, however it is still close to the highs of January.

Forex forecast: MACD indicator for the pair USD/CAD is sliding down in the negative area and is giving a sell signal. Stochastic Oscillator is moving sideways in the neutral zone and is not giving a clear signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at 1.0080, the pair will go to 1.0070 and 1.0050. Correction at 1.0150 is possible.

The data released earlier showed that leading indicators index in Canada rose by0.8% m/m in December against the forecast of +0.6% m/m. Latest statistics showed that CPI in Canada fell by 0.6% m/m (+2.3% y/y) in December against the forecast of -0.1% m/m. Despite this obvious fact, the data requires some clarification. Annual growth of CPI has been minimal since February 2011, and inflation reduced due to decline in prices for gasoline and other fuel.

Therefore, basing on the current inflationary situation, the Bank of Canada can keep inflation at the existing level for some more time with no damage for its monetary policy.

At the same time, according to the forecast of the Bank of Canada, inflation will slow down to +1.5% on annual basis in April-June.

We would remind that, last week the Bank of Canada left interest rate at the level of 1.0% per annum, which did not become a surprise for the market.

According to the updated estimates of the Bank of Canada, GDP in the country will amount to 3.1% in Q1 2013; inflation will reduce to 1.5% in Q2 this year. At the same time, interest rate can go up in the moderate pace during all the year of 2013, while decline in mortgage rates will encourage boost in the volumes of lending to households.

Statistics demonstrated that sales of new cars in Canada reduced by 1.0% in November, to137.640 thousand, smoothing over the rise achieved over the few previous months. It became known earlier that house price index in Canada rose by 0.3%in November against the growth of 0.2% in October and expectations of the same level.

GDP in Canada rose by 3.5% y/y in Q3 against revised decline of 0.5% in April-June. Economists predicted growth of the index of 3%.

The data showed that sales increased by 0.2% in the manufacturing sector of Canada against expectations of 1.2%, the main driver of the growth was general rise in the sector and improvement in some of its sections: such as industrial equipment sector, for example. Number of new orders in the sector rose by 3.7%in November, stocks in the warehouses: by 0.4%.

Tags: