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CAD: Canadian Dollar remains in the range, giving way to USD

At the Forex currency market the Canadian Dollar rate is traded downward on Friday, as investors have withdrawn from the risky positions at the end of the week and under the pressure of the external background.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD however it is going up, giving a pair buy signal. Stochastic Oscillator is giving a pair sell signal, being in the neutral zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0000 the pair will go to 1.0030 and 1.0050. If upward breakdown will not take place the pair will continue to consolidate close to the current levels.

Earlier, the head of the Bank of Canada Mr. Carney noted that some Central Banks stay below inflation curve, although in Canada, inflation levels are moderate. At the same time Carney emphasized that economy and trade deteriorate in the country due to the rise in the rate of the CAD.

According to the experts from the International Monetary Fund, Canadian economy will grow by 2.3% y/y in the current year; this was a downgrade compared with the forecast of October (+2.7% y/y).

At the same time IMF expects that in 2012 Canadian economy will increase by 2.7%. The exact figures of the GDP growth in the country will be published on 28 February but meanwhile IMF supposes that the indicator will be at the level of 2.9% (earlier – 3%).

As for the exchange rate of the Canadian Dollar in the current year, IMF believes that if average prices for the oil will be maintained at about 90 dollars for the barrel (in October- $79 per barrel), the CAD will consolidate with the help of fundamental support provided by the raw material economy of the country.

We would remind that at the meeting of Bank of Canada this week, the regulator decided to keep interest rate unchanged, at the level of 1%. Given the non-uniform statistical data on the nearest neighboring country, the USA, a step is perfectly logical.

 

 

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