Forex Blog
Blog-FX.Com

At the Forex currency market the Canadian Dollar rate continues to grow on Wednesday, taking advantage of the stable situation at the world capital markets and high oil prices.

Forex forecast: MACD indicator for the pair USD/CAD has broken through the signal line from bottom to top, however it shifted to the lateral movement and is moving along the signal line, not giving a clear signal. Stochastic Oscillator goes down in the neutral zone, giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 0.9660, traders’ target will be the levels of 0.9630 and 0.9610. If downward breakdown does not take place, the pair will consolidate close to the current levels.

The Bank of Canada left the interest rate unchanged at the level of 1.00% per annum which agreed with market expectations. The regulator said in the follow-up comments that minimization in incentives shall be thoroughly considered, although eventually all the incentives will be phased out. According to the Bank of Canada, core inflation remains relatively low and economy is active, as expected. At the same time expensive Canadian Dollar may well become a break on national economic growth and provide a restraining influence on inflation.

In addition, according to the presented data prices for industrial goods rose by 0.5% m/m in April against the forecast of growth by 0.7%.

Inflation in Canada increased by 3.3% y/y, 0.3% m/m in April against the forecast of 3.4% y/y and 0.5% m/m; while energy costs rose by 17.1% y/y, as per the estimates of the Canadian Statistics Service.

The Bank of Canada stated earlier that CPI in the country will begin to rise, as soon as it exceeds expected level. At the same time value of key index of net CPI is also growing.

It became known yesterday that balance of current account in Canada was at the level of –CAD $8.92   billion in QI against the level of CAD$10.28 billion in QIV last year. In addition, real GDP of basic prices increased by 0.3% (+2.8% y/y) in QI against revised level of -0.1 % m/m in February.

Note: GDP increased by 1.0% on quarterly basis (+3.9% y/y) in QI against the rise of 0.8% a quarter earlier.

It became known earlier that retail sales in Canada rose by 0.4% in February against the fall by 0.4% in January. In addition, the index of leading indicators in Canada increased by 0.8% in March versus 0.8% m/m earlier and wholesale sales declined by 0.6% in February against 1.5% m/m in January.

Earlier Imperial Bank of Commerce reported that revision of its GDP forecast for QIV 2010 up to 2.6% against the previous level of 2.3%, the Bank expects that economic growth will increase by 2.6% this year (2.4% previously)

Tags: