Forex Blog
Blog-FX.Com

At the Forex currency market the Canadian Dollar rate is traded slightly upward on Thursday, with the help of general interest in risk and stable oil prices.

Forex forecast: MACD indicator for the pair USD/CAD is in the positive area and is moving along the signal line, not giving a clear signal while volumes are average.  Stochastic Oscillator remains in the overbought zone, and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0200, the pair will go to 1.0190 and 1.0170.

It became known yesterday that GDP in Canada increased by 3.5% y/y in Q3 against revised decline of 0.5% in April-June. Economists predicted growth of the indicator by 3%.

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.

Worth noting statistics of the week is that prices for industrial goods reduced by 0.1% m/m in October while growth of 0.1% had been expected. Prices for raw materials fell by 1.2% m/m in October against the forecast of +1.0%.

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 was below the previous level of 3.1% y/y, however within the range of 1-3% specified by the Bank of Canada. Last month, prices in Canada increased mostly for gasoline and food.

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.

Unemployment rate increased by 0.2% in October,  up to the level of 7.3% versus the level of 7.1% in September.  Full employment reduced by 71.7 thousand, part- time employment increased by   17.7 thousand. Overall rate of employment in Canada fell by 54 thousand last month against the growth of 60.9 thousand in September.  After the release of this statistics representative of the Bank of Canada Harper noted that employment statistics fully reflects low confidence both in Canada and in the world; however labour sector is very volatile.

Earlier the head of the Bank of Canada Mr. Carney said that the regulator will maintain the rate at the level of 1% under the influence of the 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.

Tags: