In the confrontation between the Australian dollar and the Canadian dollar, the CAD still wins despite the drop in oil prices. Both risky currencies were under pressure due to the outflow of investments in safe assets. In this situation, macroeconomic reports have become a key factor again.
This week, data on the trade balance in Canada for October was published. A surplus of 2.09 billion CAD was recorded, exceeding the forecasts. At the same time, exports rose to an all-time high. This increases the likelihood of an increase in the rate by the Bank of Canada earlier than planned. Meanwhile, oil began to recover after falling below the $70 mark. The downward trend in favor of the Canadian dollar continued.
The Australian dollar, being a key risk asset, is still under pressure as concerns about a new strain of coronavirus grow. The RBA's decision to maintain the current rate with the forecast that the pandemic will not be able to hinder the recovery of the Australian economy temporarily stopped the fall of the AUD today. Reports on retail sales and business activity also suit investors, but the difficult situation with the pandemic and the strained relations with the largest trading partner, China, do not contribute to the strengthening of the AUD.
Over the next 10 days, volatility will remain at the same level. Next week, the focus will be on the report on industrial production in China, the consumer price index in Canada and the business confidence index in Australia. Most technical analysis tools indicate the effectiveness of the deals to SELL. We believe that the Canadian dollar, being one of the strongest currencies of this year, will also be successful in the fight against the Australian dollar. Therefore, today we are opening the deals to SELL.
