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At the Forex currency market the Canadian Dollar rate is traded downward on Tuesday, as investors do not rush to enter into risky assets due to ambiguous external background.

Forex forecast: MACD indicator for the pair USD/CAD is in the positive area and started to go down in the positive area, volumes are decreasing. Stochastic Oscillator is going up in the neutral zone, giving a buy signal. Earlier it has left oversold zone is moving along the signal line, not giving a clear signal, while volumes are below average.  Stochastic Oscillator remains in the oversold zone, and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0190, the pair will go to 1.0210 and 1.0240. The rate of the CAD remains under pressure since last Friday when investors’ interest in risk begun to decline.

At the end of last week it became known that unemployment rate in Canada increased by 0.1% in November, up to 7.4%, while the number of employees reduced by 18 thousand. Moreover, share of labour force decreased by 0.1%, to 66.6% last month. GDP in Canada rose by 3.5% y/y in Q3 against the revised decline of 0.5% in April-June. Economists predicted growth of 3%.

Earlier the head of the Bank of Canada Mr. Carney said that the regulator will maintain the rate at the level of 1% due to the influence of European developments. He believes that situation with European debt has deteriorated prospects of the global economy and spread panic in the financial markets. Taking into account the foregoing it is obvious that the program of providing help to the banks will be continued. The Bank of Canada along with other largest world’s banks supported the idea of the U.S. FR to lower swop interest rates which will enable to increase liquidity of the USD at the market and stabilize monetary situation.

Canadian monetary politician Mr. Flaherty noted this week that situation in the world economy would not change until Europe allocates more resources to fight against crisis. He shares point of view of German politicians and IMF that lost time will cost expensive price to Eurozone.

The Bank of Canada believes that country’s GDP will amount to 2.8% in 2011 (decline by 0.1% against the forecast in April), in 2012 it will be: 2.6% and in 2013: 2.1%.  According to the Bank, export performance in Canada is weak, because low demand in the U.S. impedes progress in the index and expensive CAD also offers a challenge. The rise in the interest rate in Canada will directly depend on stability in economic growth.

CPI rose by 0.2% (+2.9% y/y) in October against the forecast of growth of 0.1% (+2.7% y/y). The indicator happened to be lower than the previous level of 3.1% y/y, however, it is still within the range of 1-3% specified by the Bank of Canada. Last month, prices in Canada increased mostly for gasoline and food.

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