The uptrend ended in the middle of last month and the rates moved to decrease in favor of the CAD. The drop in the value of the Australian dollar was mainly due to the rapid decrease in commodity prices, especially iron ore, which fell by 15.6% since mid-March. Oil, which in turn has an impact on the value of the Canadian currency (despite a number of negative factors) is at a relatively high level and is trading steadily above $60.
This week the Australian dollar continued its rapid decreasing. This was facilitated by the decision of the RBA to keep the rate at the same low level. It should be noted that the RBA is not interested in the AUD strengthening and considers this as a risk for the Australian economy. The reaction of investors was restrained because this stance matched analysts' expectations. However, news about the manufacturing PMI index growth to a record level of 63.1 points in March remained unnoticed by investors amid information from the RBA.
The Canadian dollar in turn continues to receive support at the expense of consistently high oil prices, although the situation on the oil market did not change: the United States continues to increase oil production. Moreover, oil remains under pressure due to a likely trade war between the US and China. The CAD was also supported by a statement of the Minister of Foreign Affairs of Canada Chrystia Freeland, who announced significant progress in negotiations with the USA on modifying NAFTA.
Negative statistics about the trade balance of Canada prevented the strengthening of the CAD and caused a price correction. However, the Canadian dollar can get support today by new data about the employment market. The rapid upward trend will gradually lose intensity, but is likely to continue in the near future. In this situation the most optimal course would be the short deals on the trend, which can be effective in the medium term. At the same time, anti-trend deals can still be effective in the short-term trading given that the price correction has not been completed yet, which is confirmed by the MACD and Stochastic oscillators.
