The Canadian economy which is depending mainly on exporting the raw material and specially the crude oil to US is looking improving following the US recovery unfazed of the retreating of the Chinese pace of growth, the struggling EU economy and also the Japanese shrinking.

The Canadian dollar could be boosted by the end of last week with increasing demand for commodities and energy following PBOC’s decision to lower the interest rate by 0.25%.   

USDCAD has fallen below last Tuesday low at 1.1261 reaching 1.1192 by the end of the week, before closing it at 1.1231, After Oct CPI rose by 2.4% y/y, while the consensus was referring to surging by 2.1%, after soaring by 2% in September and also Oct BOC Core CPI which excludes the food and energy climbed up by 2.3% year on year while the median forecast was increasing by 2.2%, after growing by 2.1% in September, as the same as BOC inflation expectation of watching it between 2% to 3% yearly.

The inflation data which came from EU yesterday have underscored the retreating of the prices power and the persisting of the disinflation case in EU, as Oct Germane HICP rose by only 0.7% as expected after rising by 0.8% in September and France Consumer Price Index (EU norm) final of October rose by 0.5% after rising by 0.4% in September and Spain HICP retreated yearly by 0.2% as expected, after falling by 0.3% in September and also Italy Consumer Price Index (EU norm) final of October rose by 0.2% as expected, after retreating by 0.1% in September which are close rates to the preliminary readings suggesting no change of EU CPI of October which came initially wit rising by 0.4%, after it rose yearly by 0.3% in September to record the lowest pace of rising since October 2009, while the ECB yearly inflation target is at 2% y/y which has not been seen since Jan 2013 with existence below 1% since October 2013 suggesting continued need of stimulating the Economy to not watching the disinflation turning to deflation specially as the continued falling of the energy prices can take its toll on this rate later to drive it below the zero line.

The leg which has started on Oct. 21 at $1255.20 per ounce looked serious from its beginning as a lower high below $1245 per ounce which came also after 1392.20 below 1433.70 per ounce which has been reached on Aug. 28, 2013, after forming a floor of the triangle at $1180.30 on June 28, 2013.

This floor has endured previously retreating to $1182.45 at the ending day of 2013, before carrying the gold up from $1183.15 which has been reached on Oct. 6 to $1255.20 per ounce whereas it has managed to dive its leg below this floor triggering more stop loss orders of the buyers leaving the gold exposed to increasing downside momentum and now in the case of sinking further, it can meet supporting level at $1156.7 per ounce which has supported it previously on Jul. 25, 2010, before 1185.35 which can be followed by $1044.20 per ounce before the psychological level at $1000 per ounce.

The pressure on the sterling returned back with lower inflation data over the consuming level and the producing level too, as the data have shown today that UK CPI retreated to 1.6% year on year in July while the market was expecting 1.8% from 1.9% in June.

UK PPI input prices slid by 1.6% y/y in July while the consensus was falling by 1.1% after slumping by 0.9% in June while the UK PPI out pout prices plummeted by 7.3% y/y and the expectations were referring to 6.5% slide after dropping by 4.5% in June.

While the concerns about the houses prices retreating have been underscored again today by rising of UK DCLG Housing price index by only 10.2% while the consensus was 11.2%from 10.5% in June, after Rightmove housing price index of August came in the beginning of the week to show monthly slide by 2.9% has been the biggest since December 2011 from -0.8% in July.