The rates continue within the downward trend in favor of the CAD. The situation has not yet changed, even with the increased probability of solving the trade conflict between the US and China. The continued growth of oil supports the cost of the CAD at a high level.
The Australian dollar also received some support this week, given the perspective of resolving the trade conflict between the US and China. However, among investors there are some doubts about perspectives in the Australian economy: housing prices are falling and wage growth rates remain very low, which affects the economic activity of the population. The last Protocol of the RBA on monetary policy was assessed as generally negative. Despite the fact that the unemployment rate remains low for the second month in a row, inflation remains very low, according to the RBA, which could negatively affect further GDP growth. In addition, the economic growth forecast was lowered from 3.5% to 3.0%. The rate has once again remained at a record low level, with no prospects for an increase in the foreseeable future.
In the absence of any new data on the Canadian economy, the exchange rate depended solely on oil prices and the AUD value. Despite some retreat within a minor price correction, the CAD feels confident against the AUD. At the same time, oil prices are likely to continue growth given the significant reduction in oil exports by Saudi Arabia and other OPEC countries, as well as lower risks in the world economy, in case of a positive outcome of the trade talks between the US and China. Despite the growth of shale oil extraction to the record level, there is still a certain balance on the market, and Saudi Arabia is even ready to leave some oil markets to American producers in order to maintain oil prices at the proper level. In addition, the market continues to assess the decline in oil exports from Iran and Venezuela.
Thus, it can be assumed that the CAD will continue to be supported by high oil prices in the near future. At the same time, a week later on March 1 investors will focus on the situation with the conflict between the US and China. Earlier Donald Trump promised the introduction of new trade duties on imports from China, if there is no deal between the two countries before March 1, but recently he did not rule out the extension of the final date. In this situation, the most optimal can be considered the deals in favor of the CAD, which is also confirmed by the Stochastic oscillator and other technical indicators.
