2012-02-24 14:24:00
At the Forex currency market the Canadian Dollar rate goes down slightly on Friday although it is still strong enough to continue growth.

Forex forecast: MACD indicator for the pair USD/CAD is going up slowly in the negative area and is giving a buy signal. Stochastic Oscillator goes up in the neutral zone and is giving a buy signal.

Forex recommendations: in case of breakdown at 0.9980 the pair will go to 0.9990 and 1.0020, however a chance is that the pair will go back to 0.9950.

The Bank of Canada expressed concern about the state of the housing sector; according to the regulator 10% -decline in the sector can lead to reduction in consumption by 1% although the bulk of credits on property were used to finance consumption. 

The data released earlier showed that new orders in the manufacturing sector fell by 2.8% in December against prior expectations of +3.6%. Number of outstanding orders in this sector fell by 1.6% (versus +1.2% previously); Sales in this sector were low: growth amounted 0.6% in December against expected+1.9%.

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

Statistics released earlier showed that leading indicators index in Canada rose by 0.8% 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.

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 Q2this 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.