The rates continue within the downward trend. At the same time, volatility has been increasing recently: over the past 3 months, the value of the Canadian dollar against the yen has changed from 83.2 to 79.9 JPY. The rates have fallen to the lowest level in the last 3 years and given the large number of negative external factors for the CAD, there is every reason to expect the lows to be updated in the near future.
In early August investors received a confirmation of their fears: the trade conflict between China and the United States, despite the negotiations, continues to develop with renewed vigor. Each round of negotiations brings to the market either uncertainty or growing differences between the parties to the conflict. This month, Donald Trump announced the introduction of new duties on goods from China. China reacted by controlling the CNY value. The escalation of the trade conflict occurs amid the widespread easing of monetary policy by major Central banks, given the growth risks. This could lead to a full-scale global economic crisis and a recession in the global economy.
Investors this week began to massively buy safe assets, which led to an increase in their value. Gold for a few days rose to an unimaginable level - 1,490 USD. The yen also strengthened visibly against the major currencies, and internal factors did not hold back the strengthening of the yen this week. Some indicators of the Japanese economy even improved despite the economic downturn. In particular, the household expenditure index rose by 2.7%, although it was expected to be twice lower at 1.3% in June.
The Canadian dollar in the absence of important macroeconomic reports was entirely under the influence of adverse external factors, such as the rapid decline in the cost of oil due to the development of the trade conflict between China and the United States.
We suppose that the demand for safe assets will increase. So the rates are expected to continue decreasing in the near future right to the support line. Most technical analysis tools, including the Stochastic oscillator, also signal the efficiency of the deals to SELL.
