The rates continue within the downtrend in favor of the CHF, which is the only safe asset in this currency pair. Choosing between the Canadian dollar and the Swiss franc, investors preferred the franc in October, on the background of problems in the Chinese economy and inflation caused by rising oil and gas prices. The global economy was again in a high-risk zone, and this motivated investors to buy safe assets. However, the situation is changing in November, and right this week we received positive signals from China, where the October report showed an increase in the trade surplus amid falling imports.
The oil rally, which stimulates the CAD to grow further, continues. The Canadian dollar has already secured the status of the strongest currency of 2021. Nevertheless, everyone understands that oil prices are near their peak for this year. In the second half of 2021, the main driver for oil was the energy crisis in the EU and rising gas prices. Now the cost of gas has decreased, and the demand for alternative oil and coal is decreasing. According to the forecasts of the International Energy Agency, by the end of the year there will be a small oversupply of oil on the market, although in the future demand will grow, and oil still has the potential to grow in the long term.
As for the macroeconomic domestic component, the Canadian dollar has every chance to return to growth. According to the latest reports, the unemployment rate in Canada has been declining for the fifth month in a row, and the Bank of Canada became the first to stop its quantitative easing program and announce plans to raise the rate next year.
The CAD's return to growth has become a matter of time in the current situation. Volatility is expected to increase next week, when inflation data in Canada is published. Most technical analysis tools indicate the efficiency of the deals to BUY. Therefore, today we are buying the Canadian dollar.
