The rates of the AUD/CAD are in the frames of a weak downward trend. The Canadian dollar gets support from positive economic indicators and sustained oil prices. This week the Canadian dollar strengthened significantly on Wednesday, September 6 after the Bank of Canada unexpectedly raised the interest rate to 1%, saying that stable economic growth requires less regulation of the economy by the state. The good situation in the economy has been confirmed this week by the reduction of the negative trade balance from 3.76 to CAD 3.04B, which exceeded the expectations on the market.
The business activity index decreased from 60 to 56.2 points and did not change the situation in favor of the Australian dollar. The release of the disappointing Australian GDP had a negative impact on the value of the AUD. In addition, the RBA left interest rates unchanged. This didn't support the Australian currency, of course, although today the Australian dollar managed to strengthen a bit thanks to the fact that oil prices began to decrease amid the increased volume of oil reserves in the United States, which significantly exceeded the forecasts.
Market volatility will remain at a relatively high level. Today we expect new data about the situation on the employment market in Canada. Given the forecasts from the Bank of Canada, we can assume that the indicators of the labour market will be positive, and this will allow the Canadian dollar to take the initiative and strengthen. The Stochastic oscillator indicates that the rates are in the overbought zone now. So after the price correction the rates can continue to go down. In this situation the most optimal course would be the short deals on the trend.
