No strong arguments for changing of the Canadian monetary policy and trend of CAD.

Forthcoming The Bank of Canada Monetary Policy Report, and a decision on interest rates. At the same time will be declared the new Q3 forecasts for the Canadian economy. Most likely, the base rate will remain 0.50%. There is likely to be reduced below the forecast growth of the Canadian GDP. It is most closely linked with falling oil prices. The general sentiment is that the interest rate will be maintained until 2016 as next year risks remain high due to the uncertainty of global economic growth, as well as many outstanding issues facing the US.

Short-term traders abreast of changes in oil prices and comparing the current macro data from Canada. Yesterday CAD gradually recover their Monday’s losses against the USD, but today the decline continues. Technical picture USD/CAD Daily is currently after correction in an extended uptrend. Repelling the strong horizontal support level around 1.2835 and rise above the MA100. Most likely in breach of the diagonal resistance around 1.3018 upward movement will continue.

The impact of China's economic slowdown continues to be updated factor through its direct impact on commoditis, USD and oil (together with uncertainty before the inclusion of Iran again in the energy market). The updated forecast yesterday of the World Bank also is without optimism: five years continued downward movement of the prices of most commoditis continues ... There are sufficient reserves of oil and other commodities, but demand is weak, particularly for industrial raw materials, so prices can remain permanently low.

It is important to note that Canada's GDP increased in June and July after five months a steady decline, this growth of the indicator was the result of good performance in the mining and petroleum industry, partly supported by the financial and insurance sector. On the other hand, the labor market does not show the expected positive momentum. Working positions with full employment in September fell to its lowest level within four years, which was somewhat offset by solid growth in part-time employment. The overall level of unemployment in absolute terms increased, but with the growth of the total number of active population.

Uncertainty in the medium-term trend in the Canadian economy added the political victory of the Liberal Party. It is no coincidence that CAD reacted with a decline of this event. They worry about the intentions of the new government tax reform, which should press higher incomes at the expense of ease of average earnings. Liberals plan the formation of huge funds to be invested in infrastructure, which is interpreted diversely as a factor for a possible stimulus.

On this general background lack strong arguments in favor of an unexpected change in monetary policy by the Bank of Canada. As an argument in support of the change can be offered common practice of all central banks to make these moves unexpectedly. The press conference of the Governor of the Bank of Canada Stephen S. Poloz is scheduled for 15: 15 GMT.

G.Hristov / Head of Fundamental Analyzes