AUD/CAD is one of the most highly volatile charts today. However, we still highlight the rapid downtrend in favor of the Canadian dollar, which has been observed since January of this year.
This month we observe a price correction in favor of the Australian dollar. As well as in the case with USD, the Australian currency received support on the signals of a rate increase in the future. The AUD was also supported due to the increase in the trade surplus in May. At the same time, the Canadian dollar was under pressure due to lower oil prices, despite GDP growth contrary to forecasts.
Assessing the prospects for the Canadian dollar, we first of all pay attention to oil, which is under pressure due to the strengthening of the USD, as well as lower demand from China and other countries. The reduction in oil supplies still does not convince investors about the demand for black gold. Forecasts until the end of the year are not impressive, because over the next 6 months, investors will expect an increase in the US rate, which will lead to a strengthening dollar and, at the same time, increase pessimism about the growth of production and the global economy.
Next week the focus will be on the meeting of the Bank of Canada and their decision regarding the rate. We believe that they will follow the example of others and postpone the rate increase until the end of the year, but there may be surprises. In the short term, we can still earn on the price correction, but in the long term, we believe the selling will be effective and the downtrend will continue.
