At Forex currency market the Canadian Dollar is still traded close to the yesterday’s closing session level on Thursday morning since the news that the U.S. interest rate would remain at the previous level broke, as well as the U.S Monetary Authorities confirmation to maintain the rate at a low level for a long time.
According to Scotia Capital experts, the market feels better since the FR decision was taken, thus, getting some support for the risky positions trading.
For the CAD the market situation is favourable in general in spite of the prior volatility. “As long as the pair CAD/USD will not exceed the level of 1,0300, it seems that the Canadian Dollar will be in a secured position”, – Scotia Capital pointed.
The fact that the Canadian Dollar fell this week at Forex speaks of the probable technical correction, which seems natural after the growth wave.
In the short-term prospects the pair USD/CAD has support level of 1.0064 and resistance level of 1.0207.
The head of the Bank of Canada Mr. Carney said in his speech earlier that economic system recovery in the country will depend on the consumer spending performance; the business investment level shall grow this year in Canada. Recovery support till 2012 will also depend on the business investments; the big companies do not experience any difficulties in accessing finance.
Carney pointed out that the process of stepping aside from the principle “too big to allow bankruptcy” is too slow and in comparison with the USA, industrial productivity in Canada is deteriorating.
We would remind that the interest rate was left upheld at the beginning of March as it was expected, but the banks representatives suddenly passed some sharp comments to which the players were obviously not ready.
Thus, the Central bank clarified that inflation level and production volume are climbing over the anticipated growth level which can provoke rates growth before the summer.
It is worth noting that the Bank of Canada’s statement is not unfounded: more stable labour market recovery, increase of the inflation pressure, more efficient rate of the economic growth – all these will support the Central Bank decision to raise basic rates earlier than it was scheduled.
It is also worth noting that earlier the Barclays Capital Inc analytics forecast became public; according to it the Canadian dollar can reach parity with the USD due to the Canadian economic stability at the Forex market this year. “We believe now that the Canadian dollar’s weakness period is over and ascending trend for it is more probable. It seems that the Bank of Canada is convinced that the recovery process for the national economy has already started so they can shut their eye on the “Canadian” uncontrollable rise”. - believes Mr Anglader from Aroop Chatterjee.