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CAD: Canadian Dollar has reached the highs of May again
At the Forex currency market the Canadian Dollar rate has reached highs of May this year on Monday morning, supported by stable external background and oil prices which continue tom grow.
Forex forecast: MACD indicator is moving in the positive area for the pair USD/CAD; however it goes down, giving a pair sell signal. Stochastic Oscillator tends to reverse in the oversold zone, still staying there, although it has started to shape a buy signal.
Forex recommendations: in case of breakdown at the level of 0.9790, the pair will go to 0.9570 and 0.9550.
If downward breakdown does not take place, the pair will consolidate close to the current levels.Real GDP in Canada remained unchanged on monthly basis in April, showing growth by 2.8% y/y against the forecast of -0.1% m/m (+2.7% y/y).
Decline has been recorded in the manufacturing sector (-0.7% m/m) which is the consequence of reduction in the level of production in the car sector. GDP increased by 1.0% on quarterly basis (+3.9% y/y) in QI against the rise of 0.8% a quarter earlier.Employment sector in Canada is still strong: according to the data released earlier, weekly wages rose by 0.7% in April, to the level of C$876.44 (+3.5% y/y).
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.At the beginning of June 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.According to the plan of the Finance Ministry of Canada, the country shall revert to the budget surplus by 1014.
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