CAD Currency Pair 2015
Canadian dollar to decline
At the end of last week quotations of the American dollar against the Canadian break the resistance on a mark of 1.40 due to the publication of weaker-than-expected data on inflation and gross sales in Canada.
According to experts, the loonie fall happened at the wrong time, because the decline has a negative impact on the purchasing power of households, the debt burden of which has substantially increased, and large purchases, like the purchase of houses and cars, are at historic highs. It is also true that the higher the performance of sales data, the faster it can fall.
Looking for quotes on the oil price (which is the main potential shock generator for commodity turnover) and on the copper price (which is a benchmark for the loonie pricing perception in the context of Chinese and global economic activity) or for differentials in interest rates in Canada and the USA (which include the other two factors related to monetary policy in the forecasts) it is no wonder, that the loonie were hamstringed.
Annual retail sales growth fell from 3.8% (end of 2014) to 0.9% (September of 2015). In these provinces focused on the production of raw materials the damage done to employment in resource-extraction industries has coincided with the effect of the low exchange rate, which together had a negative impact on the purchasing power of households.
Since the beginning of December the Canadian dollar has fallen by almost 700 points against the US dollar, reaching an important psychological level of 1.4000. The last time USD / CAD currency pair 2015 was trading near this level in May of 2004. The main reason for this substantial currency depreciation is the fall of oil prices to 11-year low.
Amid the lack of key reports the traded value during the US session should be reduced, and the currency will mainly respond to general market sentiment. The Canadian dollar also weakened against the Euro: EUR / CAD currency pair 2015 grown by 0.21% to 1.5263.
However, forecasts look surprisingly.
Bloomberg experts are very optimistic about the immediate prospects of the loonie, despite the lowering of the overnight rates looming on the horizon. Their median estimate assumes a growth rate against the US dollar by 1.8%, which is the best result among G10 currencies.
Societe Generale considers Canadian dollar as the only currency that is able to bypass greenback by the end of 2016. According to the company, the quotation of USD / CAD currency pair 2015 will fall to its end to 1.31.
Citigroup, on the contrary, is sure that the pair will be forced to go much higher than the level of 1.4 in the first half of the next year, and Morgan Stanley believes that 1 US dollar at the end of December of 2016 would cost 1.44 CAD.
Technically, the bulls and bears are fierce fighting for the 1.384 level corresponding to the level of the 161.8% of AUD=CAD pattern. The nearest support is at 1.375, and till the quotations are holding higher than both the moving averages and the level of 127.2% (1.36) of the model, the sentiments of the market are still bullish.