Article by AlgosysFx Forex Trading Solutions
In the currency skirmish to close out the week’s exchanges, the Canadian dollar is presupposed to beat its Australian counterpart today. The Loonie currency looks to take advantage of reports out earlier that the Reserve Bank of Australia could ease its monetary policy. On the economic docket today from the Maple Leaf is the nation’s inflation
reports that could likely sustain the Canadian currency’s advance. Also seen to influence the currency pair’s price activity is a report from the United States regarding the financial confidence of consumers from the world’s largest economy.
The Loonie currency is set to best the Aussie for the second consecutive trading week as it likewise extends its gains against its primary trading partner’s monetary exchange. Trades for the AUDCAD today are projected to remain bearish, and a sell bias is proposed.
In a report on the Australian Treasury’s website entitled “Understanding the appreciation of the Australian dollar and its policy implications,” it states that “the Australian dollar is overvalued compared to its medium-to-long run equilibrium value. Though the Treasury admitted that the estimate is still subject to considerable uncertainty, this opens up the possibility for the RBA to further cut its interest rate. The Aussie fell quite sharply as a result of the news.
Meanwhile, inflation data out today from StatsCan is estimated to be moderate. Both CPI and Core CPI for the month of July are forecast to be at 0.2 percent for the past
month. After a 0.4 percent beating in the previous release, a rebound in the nation’s inflation is believed to push the Canadian Loonie higher.
In addition, the preliminary reading for the University of Michigan Consumer Sentiment is estimated to go up by two ticks from the upwardly revised 72.3 point release for July. Economists project a grade of 72.5 for this month. Though the rating has yet to improve more than the year’s average of 75.9, this should still account for more than the last August’s 55.7 figure.
Improving conditions in North America provide a lift to the demand for the Loonie ComDoll. Considering these factors, a sell position is advised for the AUDCAD today.
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