Binary Options Trading: New Trends Seen in USD/CAD

Binary Options Trading: New Trends Seen in USD/CAD

The Bank of Canada released its fiscal policy last month and maintained status quo by keeping the target of an overnight rate at 0.5 percent, bank rate at 0.75 percent and the deposit rate at 0.25 percent.  This has some drastic implication for Binary Options traders that are looking to initiate new PUTS and CALLS positions in the USD/CAD, and this should be done using the CorrecTrade tool that is offered for traders by BinaryOptionsReporter.

Bank affirmed its projection of returning to 2 percent inflation target in 2017 and believed that the pick-up in the economy will happen albeit increased uncertainty in the world economy. The bank had marked down its expectation of Global growth to 2.9 percent in 2016 compared to its previous estimate of 3 percent.

USD/CAD Binary Options Trends

In Canada, the GDP has expected to have contracted by 1 percent for the quarter ended June 2016, from the previous quarter growth of 2.4 percent. It maintained that the reduction in growth is due to uneven consumer spending, unpredictable trade flows and Alberta wildfires. The bank of Canada projects to have the inflation average close to 2 percent in 2017, as the volatility and uncertainty in global market subside.

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Inflation has moved to 1.3 percent in the month ended July 2016. The reading was lowered than the previous 2 months and was in line with the expectation. It remained below the target rate of 2 percent, which will limit the room for an upward revision of interest rates in the short term.

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At the same time, the unemployment has risen to 6.9 percent from the previous months’ low of 6.8 percent and in-line with expectation. This will put downward pressure on inflation, and hence to any upward revision to rate change.

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On the contrary, business confidence has jumped to 57, from previous months’ 51.7. The figure is above the expectation and is the highest for 2016. Indicating a stronger expansion in fiscal activity in Canada, providing room for rate adjustment.

BREXIT Impact on Forex Trading

The BREXIT has taken place and will have an impact on the global economy when the process of exiting from the European Union by the UK starts. Bank of Canada believes that there will be an extended period of ambiguity and it will reduce global growth by 0.2 percent. The other geopolitical environment may add to uncertainty and can hamper the growth.

Summing up, inflation, unemployment, business confidence and other global variables, the Canadian central bank will have a little room for upward revision in interest rate in near future.  

 

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