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At the Forex currency market the Canadian Dollar rate tries to regain part of its losses after sales on Friday which were observed amid the surge of investors’ risk aversion.

Forex forecast: MACD indicator is in the positive area for the pair USD/CAD; however it is moving along the signal line and is not giving any signal. Stochastic Oscillator reversed in the neutral zone, shaping a buy signal which is still very weak.

Forex recommendations: off the market.

Feasible event scenario: in case of breakdown at the level of 0.9790, the pair will go to .9810 and 0.9830. If the level of 0.9750 is exceeded, traders’ target will be the level of 0.9710.

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 earlier 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.

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.

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

As it became known last week, trade balance in Canada amounted to -CAD 0.92 billion in April; index of prices for new houses rose by 0.3% m/m in April against the forecast of +0.1% m/m.?

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.

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