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 The Canadian Dollar rate is traded significantly upward at the Forex currency market at the end of the week; rebound seems unavoidable after collapse on Thursday, when the CAD fell to the lows of February.

Forex forecast: MACD indicator is in the positive area for the pair USD/CAD and goes up steadily, while volumes are high. Stochastic Oscillator has come into overbought zone, and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0260, the pair will go 1.0280 and 1.0320. If upward breakdown does not take place, the pair will remain at the current levels.

As it became known yesterday, volume of retail sales in Canada fell by 0.6% in July against the forecast of 0.3% m/m. In addition, inflation in Canada rose by 0.3% m/m (+3.1% y/y) in August. The data on net CPI showed the rise by 0.2% m/m (+1.6% y/y) in July. In June the indicator fell by 0.7% m/m (+3.1% y/y).

The Bank of Canada believes that GDP of the country will amount to about 2.8% in 2011 (reduction by 0.1% versus forecast of April); in 2012 it will be 2.6% and 2.1% in 2013. According to the evaluation of the Bank, exports performance in Canada is negative because low demand in the USA prevents the rise of the indicator and expensive CAD makes situation even more complicated.

The growth in the interest rate in Canada will directly depend on stability in economic development. The head of the Bank of Canada Mr. Carney said earlier that there are several significant obstacles on the way of Canadian economic development. First of all it is the growth of the Canadian Dollar and secondly, it is European debt crisis, plus to this, drawn-out dialogue about the U.S. national debt also casts a dark shade on the Canadian economy.

Central Bank will be able to waive further economic stimulation only when economic system will show steady self-sustained growth.As it became known earlier, number of begun construction in Canada increased to 205.1 thousand in July, which is higher than the forecast of 194.5 thousand and above the previous level of 196.6 thousand. In addition, trade deficit in Canada was at the level of -$1.6 billion in June against the level of -$1 billion in May, which is probably related to the problems in the neighboring U.S.The data released earlier showed that unemployment rate in Canada increased to 7.3% in August against the forecast of 7.2% and previous level of 7.2%.

In addition, In addition, labor productivity fell by 0.9% on quarterly basis in Q2 against the forecast of decline by 0.7% q/q. It also became known that number of begun construction in Canada fell to 184.7 thousand in August against the forecast at 200 thousand. It is clearly obvious at the moment, that slowdown in the key indicators was caused by the state of the global economy and proximity to the Unites States.

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