AUD: Australian Dollar continues progressive advance

At the Forex currency market on Monday, the Australian Dollar rate continues progressive advance on Tuesday morning.

Forex forecast: MACD indicator remains in the negative area for the pair AUD/USD, and is growing and is giving a buy signal, while volumes are below average. Stochastic Oscillator goes up while entering overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0675, the pair will go to 1.0690 and 1.0720. If upward breakdown does not take place, the pair will stay close to the current levels.

According to the data released on Tuesday, number of permits to construct in Australia increased by 1.0% m/m in July against the decline of 3.6% m/m n June. It is a good indication, however it is too early to speak about tendency.

As it became known yesterday sales in the primary housing market of Australia fell by 8.0% m/m in July against the decline of 8.7% m/m a month earlier. Presently, it looks more like stabilization of the situation, than a tendency for improvement in the indicator.

It became known earlier that price index for corporate services in Australia remains unchanged on monthly basis, -0.5% y/y in July against the level of -0.8% y/y in June. In addition, index of leading indicators Conference Board in Australia fell to -0.8% in June; while a month earlier it had amounted to -0.1%.

Index of leading indicators Westpac in Australia increased by 0.2% m/m (+1.6% y/y) in June against the growth of 3.0% y/y in May. However, the rate of decline in the index is minimal, considering that the index has been steadily decreasing since 2010. This index indicates prospects for economic activity for the next 3-9 months and judging by its dynamics, rapid growth can be hardly expected.

Minutes of the last meeting of the Reserve Bank of Australia which was made public earlier, showed that leading economic indicators demonstrated moderate increase in employment, and if the world financial turmoil would continue, it could become a factor of pressure on household spending and sentiments in the business circles, which in its turn, would have a negative impact on the general projections of the Central Bank. In addition, the document says that high exchange rate of the AUD and low level of households demand has a restrictive effect on inflation. Among other things at the last meeting, arguments in favour of the rate increase were suppressed by the downside risks to demand and high level of tension at the global financial sector.

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