AUD: Australian Dollar continues to be in sale

The Australian Dollar rate continues to decline at the Forex currency market on Tuesday after slight upward rebound as a part of technical correction yesterday.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, nevertheless it continues to fall, confirming a pair sell signal. Stochastic oscillator remains in the oversold zone today and is not giving a clear signal.

Forex recommendations: if bearish sentiment for the pair intensifies traders’ targets will be the local low of 0.9770.

The main negative factor for the AUD is expansion of the flooding all over Australia. It started in the North East part of Australia and in Queensland and which threatens to be the largest in the last 50 years. It is obvious now that the flooding is spreading to the South, to the area of Breesban, the third largest city of Australia. 95% of sugar production of Australia is concentrated in Queensland, as well as large amounts of coal. In general, about 20% of the entire economy of the Green Continent is located in the state of Queensland. According to various estimates, the growth of Australian economy can slow down by 0.2% in QI 2011, due to natural disasters.

In addition, investors’ concern about slowdown in exports rate  in China  are also strong, which has a negative impact on the Australian domestic currency.

The minutes of the RBA meeting of 7 December which was made public last week, showed that the rate was left unchanged, since the regulator believes that current situation can be described as moderately restrictive, because consumers are cautious, while inflation pressure does not intensify. The interest rate in Australia is now at the level of 4.75% per annum. The document reported that households might continue to rein in spending and in this case it will lead to the short term rise in inflation and also to the lack of aggregate demand in economy.
RBA meetings in 2011 are scheduled for: 31 January, 28 February, 4 April, 2 may, 6 June, 4 July, 1 August, 5 September, 3 October, 31 October, 5 December.

 

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