USD/CAD: the pair will continue. Trading Recommendations
Trading recommendations and Technical Analysis – HERE!
On Monday released a weak report on shipments in the manufacturing sector. The volume of industrial supplies fell in September by 1.5% against growth of 0.1% forecast and a decline of 0.2% in the previous month, indicating a decrease in market demand.
The Canadian currency has reacted a sharp decline. Today at 15:30 (GMT) The Bank of Canada publishes a quarterly report containing information about the current state of the Canadian economy and central bank policy.
In addition to weak economic performance in the country, the Canadian dollar under pressure against the background of steadily falling oil prices. Correlation pair USD / CAD and oil prices close to 92%. Under the conditions of excess supply of oil to the world market price of oil, and thus the Canadian dollar will be under pressure in the medium term.
The country is a net exporter of oil, and its oil sector is an essential part of Canada's economy. Canada's economy depends on the revenues of export earnings from oil sales.
Earlier in October, the Bank of Canada left its key interest rate unchanged at 0.5%, and noted that to sustain growth, inflation and the economy the Bank of Canada will be inclined to hold soft monetary policy. According to the Bank's inflation will remain below the target level of 2% before 2017, and the forecast of economic growth in Canada for 2016, 2017 lowered. Full utilization of the Canadian economy is now possible not earlier than in 2017.
Additional pressure on the Canadian dollar in the pair USD / CAD has an expectation of higher interest rates in the US. Consequently, in the short term (2 - 16 December) and in the medium term USD / CAD pair will grow. Any reduction should be seen as a pair of correction as to enter into a long position.
On Friday, the major planned inflation rates in Canada. At 13:30 (GMT) published the consumer price index for October, as well as changes in the level of retail sales in Canada in September. In the previous month, the consumer price index rose by 0.3% and 1% in annual terms. Thus, inflation remains weak, despite efforts by the Bank of Canada, which has repeatedly stated commitment to soft policy and gradually reduced during the year interest rates in the country.
See also review and trading recommendations for the pair AUD/USD!
