The rates continue within the upward trend. At the same time, we observe a slowdown in the upward movement, but analyzing the situation on the market, there is a high probability that AUD will continue to strengthen against CAD, and here’s why.
The first reason is the doubtful perspective for rising oil prices. This year we have seen many events such as the conflict in the Middle East. However, prices did not rise to $100 or more. Regular reductions in oil supplies by OPEC also did not significantly affect the rise in prices, but only kept them at a level acceptable to the cartel. The possibility of a market glut in oil amid weak demand continues to put pressure on the value of the Canadian dollar.
Another reason is the monetary policy of the Bank of Canada, which has been refusing to increase the interest rate for a long time, and given recent trends, it may even move to a reduction. And of course, the Canadian economy, which does not demonstrate outstanding economic performance, although sometimes it turns out to be preferable in comparison with the Australian economy.
The Australian dollar, being an indicator of risk sentiment, often comes under pressure as the Chinese economy in 2023 was not as strong as we are accustomed to. The economic downturn fueled demand for safe haven assets and kept investors nervous throughout the year. However, for China, 2024 may be the year of restoration of previous economic growth, which will certainly affect the value of the AUD.
Most technical analysis indicators indicate the effectiveness of the deals to BUY in the medium and long term. We believe that such deals can really bring some profit. The potential for growth is huge: these are not the rates where record highs are being tested. The value of AUD/CAD was significantly higher even this year, and in 2020 the 1:1 level was tested. Therefore, today we confidently open the deals to BUY to make a profit next year.
