Forex Blog
Blog-FX.Com

At the Forex currency market the Canadian Dollar rate weakens on Monday, pressured by the lack of decision on the public debt of the U.S. 

Forex forecast: MACD indicator is moving in the negative area for the pair USD/CAD and goes down, maintaining a pair sell signal. Stochastic Oscillator is coming out of the oversold zone, giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.9525, the pair will go to 0.9540 and 0.9560.

If upward breakdown does not take place, the pair will consolidate near the current level.According to the data released on Friday CPI in Canada decreased by 0.7% m/m (+3.1% y/y) in June. It became a negative signal for the CAD..In addition, retail sales increased by 0.1% in May against the growth of 0.3% in April.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 Q4 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.

It became known earlier that sale of new cars in Canada fell by 6.1% m/m in May against preliminary forecast of -1.1% m/m. 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.

Earlier, the Bank of Canada left interest rate at the previous level of 1.0%, which agreed with the forecast. According to the follow-up comments of the regulator, certain monetary incentives can be phased out in the nearest future and current level of inflation, which is about 3.7%, is assessed as temporary. At the same time, global inflationary pressure is obviously growing. Central Bank will be able to waive further economic stimulation only when economic system will show steady self-sustained growth.

The Bank of Canada believes that GDP of the country will account to 2.8% in 2011 (reduction by 0.1% versus forecast of April); and it will be: 2.6% in 2012 and 2.1% in 2013. According to the Bank evaluation, export performance in Canada is negative, because low demand in the USA prevents the rise of the indicator and expensive CAD makes situation more complicated. The growth in the interest rate in Canada will directly depend on stability in the economic development. 

Tags: