On Tuesday, the price of oil sharply went down amid new signals of oversupply of oil market and negative Chinese data on the decline in Chinese exports. China is the second largest importer of oil and a driver of the rise in demand of oil and oil prices. Therefore, negative data on the foreign trade of China has negative impact on the world stock indices and prices of commodities and oil and quotes of the commodity currencies.

Meanwhile, the reduction of oil production is a long-term prospect. Oil Minister of Kuwait said recently that his country would be against the freezing of oil production if Iran does not join this agreement.

It means that oil prices will go down again and the pair USD/CAD will grow up. Correlation of the Canadian dollar and the prices of oil is 92%. Since 20 January the price of oil and Canadian dollar are strengthening simultaneously. However, we cannot rely on complete adjustment of the oil prices and dynamics in the pair USD/CAD.

We shall take into account general state of the world economy and dynamics of price movement for the other commodities and macro-economic data of Canada and the USA.

Today at 17:00 (GMT+2) the Bank of Canada will announce interest rate decision. The head of the Bank of Canada Mr. Stephen Poloz keeps saying that the bank is going to stick to the soft monetary policy to support national economy. Nevertheless, in order to reach target inflation level of 2%, the interest rate can be lowered to the negative level of -0.5%. Therefore, even if today the rate will be left unchanged, any indications of such probability in future can cause decline in the CAD.

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