2012-02-08 11:55:00
Forex forecast: MACD indicator for the pair USD/CAD is sliding down in the negative area and is giving a sell signal. Stochastic Oscillator is going down in the neutral zone as well, and is giving a similar signal.

Forex recommendations: case of breakdown at 0.9930, thepair will go to 0.9920 and 0.9900.

As a raw currency, the Canadian Dollar get support from oil prices; this winter is very cold in Europe, which helped to increase demand for energy supply. Interest to risky currencies is still quite high.

The data released earlier showed that leading indicators index in Canada rose by0.8% m/m in December against the forecast of +0.6% m/m. Latest statistics showed that CPI in Canada fell by 0.6% m/m (+2.3% y/y) in December against the forecast of -0.1% m/m. Despite this obvious fact, the data requires some clarification. Annual growth of CPI has been minimal since February 2011, and inflation reduced due to decline in prices for gasoline and other fuel.

Therefore, basing on the current inflationary situation, the Bank of Canada can keep inflation at the existing level for some more time with no damage for its monetary policy.

At the same time, according to the forecast of the Bank of Canada, inflation will slow down to +1.5% on annual basis in April-June.

According to the data released earlier, real GDP in Canada fell by0.1% m/m (+2.0% y/y) in November against expectations of growth of 0.2% m/m.

According to the updated estimates of the Bank of Canada, GDP in the country will amount to 3.1% in Q1 2013; inflation will reduce to 1.5% in Q2 this year. At the same time, interest rate can go up in the moderate pace during all the year of 2013,while decline in mortgage rates will encourage boost in the volumes of lending to households. We would remind that, in the middle of January, the Bank of Canada left interest rate at the level of 1.0% per annum, which did not become a surprise for the market.

GDP in Canada rose by 3.5% y/y in Q3 against revised decline of 0.5% in April-June. Economists predicted growth of the index of 3%. The data showed that sale sin creased by 0.2% in the manufacturing sector of Canada against expectations of1.2%, the main driver of the growth was general rise in the sector and improvement in some of its sections: such as industrial equipment sector, for example. Number of new orders in the sector rose by 3.7% in November, stocks in the warehouses: by 0.4%.

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