AUD: Australian Dollar begun to grow after two-day rollback

The Australian Dollar is back to the rise at the Forex currency market on Wednesday after two days of technical correction triggered by the previous rapid growth and overheating.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and goes up, volumes are large for the indicator which helps to maintain a pair buy signal. Stochastic Oscillator continues to goes down in the neutral zone today, giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 1.0485 the pair will go to 1.0500 and 1.0520. If upward breakdown does not take place the pair will consolidate close to the current levels.

According to the data released today level of consumer lending Westpac in Australia increased by 1.2% in April, to the level of 105.3 points against the previous level of -2.4%.

Such positive data reflects public confidence in the prospects of economy. Following the meeting of the Reserve Bank of Australia last week it was decided to keep current level of the interest rate unchanged at the level of 4.75% per annum – it is the fourth time already when the RBA does not dare to continue monetary policy tightening. The decision had been anticipated and did not provoke any reaction in the market. The meetings of the RBA will be held on 2 May, 6 June, 4 July, 1 August, 5 September, 31 October, 5 December. Therefore while the rate is kept unchanged economy is steady.

Yesterday Finance Minister of Australia Mr Swan said that Australian economy is positive and will only benefit from economic growth of the developing countries. He thinks that although IMF has revised GDP forecast downward for Australia, country’s economy continues to recover. Note that IMF research showed that GDP forecast for Australia had been reduced to 3% in 2011 against the previous level of 3.5%. Floods in January partly impacted the revision of the forecast.

As it became known earlier lending in the housing sector fell by 5.6% m/m in February against the decline by 4.5% in January; according to the observers’ estimates the index collapsed due to the floods in the beginning of the year in Australia.

Macro-economic environment remains mixed in Australia. On the one hand unemployment rate reduced to 4.9% in March versus the prior level of 5.0% and employment rate rose by 37.8 thousand last month against the forecast of increase by 24 thousand. Therefore, strong performance in the employment sector pushed the AUD to go upward, instilling investors with the idea that the RBA can resume monetary tightening policy earlier.

On the other hand deficit of trade balance was recorded in the country for the first time since spring 2010 (February -?$205 billion against +A$1.4 billion in January). In addition activity index in the service sector reduced to 46.5 points in March against the value of 48.7 points in February.

 

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