EURCAD is moving in a ascending channel and the market has reached the higher high area of the channel.
Canada is to release their employment change data soon and this all correlates to the recent immigration rules change and energy crisis in the country. Here is why:
Canadian Energy Supply
A year ago, when Russian tanks and troops poured into Ukraine, it was not a surprise that oil prices climbed above $100 per barrel for the first time since 2014. This marked the first time since 2014 that prices had risen beyond this threshold. Since 2014, nobody had come close to reaching this benchmark. During the early days of the conflict, a number of analysts hypothesized that the war and sanctions imposed by the West on Russia may wreak havoc on the energy markets for many years to come.
GBPCAD is moving in a ascending channel and the market has reached the high high area of the channel.
This was because, at the time, Russia controlled 10 percent of the total supply of crude oil in the globe. After a year of this drawn-out conflict, it is unclear if Russia will be able to maintain the same level of output that it is now at. This is a particularly worrisome development when one considers the fact that Chinese demand has been on the rise since since the COVID-19 constraints have been loosened. Nonetheless, the global oil market seems to be rather steady at the time, and the record high oil prices that were seen in the first half of 2022 have not been maintained at such levels.
Canadian oil and gas companies benefited from the high prices of commodities at the beginning of this year, which, in many cases, resulted in record earnings for the companies. Despite this, the vast bulk of those earnings were put toward paying down debt and giving dividends to shareholders rather than investing in business growth or initiating innovative new projects.
The fact that there is an inherent conflict between the global desire to increase oil output and Canada’s climate obligations has not been altered in the least by the crisis that is currently taking place in the Ukraine. The conflict is between the global desire to increase oil output and Canada’s obligations regarding climate change. Because of this, there is ambiguity over investments, and companies are unwilling to considerably increase the amount of money they spend on capital due to this uncertainty.
Foreign Workers in Canada
The Government of Canada has established a target to admit around 1.45 million immigrants over the course of the subsequent three years, and they anticipate that approximately 60% of these individuals will be accepted under economic class programs. It is expected that the recent inflow of newcomers will have a variety of good repercussions for the economy of Canada, and these predictions have been made in light of this expectation. For example, the probability of finding work for recently arrived immigrants is now higher than it is for their contemporaries who were born in Canada. This is the case in Canada.
CADJPY is moving in descending channel and the market has reached the lower high area of the channel.
This is a relatively recent phenomenon that has been related to the confluence of two important developments, which are as follows: Starting in the year 2016, there was a clear increase in the percentage of recently arrived immigrants who were employed, while the percentage of native-born Canadians who were working steadily fell. This trend continued throughout the following years. Recent immigrants have a deeper link to the labor force than previous generations. Many of them already have jobs waiting for them when they get to the country, and they were allowed to enter because of the characteristics of their human capital that make it feasible for them to successfully contribute to the labor force.
Because of this, it is anticipated that immigration will result in an increase in Canada’s GDP per capita as a result of the anticipated rise in labor input brought about by immigration. This is due to the fact that immigration will result in an increase in the total number of people working in the country.
AUDCAD is moving in descending channel and the market has reached the lower high area of the channel.
The sum total monetary value of all of the finished goods and services that are produced inside the borders of a nation is referred to as that nation’s gross domestic product or GDP for short. Growth in GDP is frequently indicative of a thriving economy, and it may result in extra benefits such as an expansion of employment possibilities and a rise in the average income levels. It is projected that the arrival of newcomers would further assist in supporting the supply side economy, so lessening inflationary pressures on the economy of Canada, which will help to keep unemployment rates low.
Housing Market Downturn
The Royal Bank of Canada (RBC) has released its analysis and prognosis on the housing market in the country, and the bank anticipates that the current dip in the market will soon come to an end. In the medium to long term, the flood of immigrants would boost demand for housing, which would, in turn, raise the prospect of increasing supply shortages across the country if homebuilding did not step up.
According to the findings of the study, Canada’s housing stock needed to increase by at least 270,000 more units per year until the year 2025 in order to accommodate the country’s rapidly expanding population and emerge victorious from the affordability issue in the housing market.
NZDCAD is moving in descending channel and the market has fallen from the lower high area of the channel.
Another factor that contributed to the slowdown in the resale market was the rate-hiking cycle that the Bank of Canada was likely in the middle of, which is also known as the pause that it was likely. The Royal Bank of Canada forecast that the Bank of Canada’s 25-basis-point rate rise in January 2018 was the final increase to the historically significant 425-basis-point interest rate climb and that market sentiment would improve as soon as participants came to the same conclusion.
RBC forecast that the level of resale activity will level out in the following months, with certain regions of Canada (like Ontario and Atlantic Canada) reaching their bottom first, followed by others (like Quebec and the Prairies) reaching their bottom later.
The Royal Bank also predicted that the home affordability problem, which has persisted since 2021, will continue for some time longer before it begins to lighten off on its severity. This was notably true in the province of British Columbia, the province of Ontario, and other pricey markets across Canada, all of which saw price increases during the epidemic.
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