AUD: Australian Dollar failed to stay in the black

At the Forex currency market the Australian Dollar rate goes down in the middle of the week, although the currency looks quite attractive for the purchase at its current levels.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD, and it broke through the signal line from top to bottom and goes down gradually, giving a sell signal. Stochastic Oscillator is moving sluggishly in the neutral zone, giving a buy signal.

Forex recommendations: off the market.Feasible event scenario at Forex: in case of breakdown at the level of 1.0600, the pair will go to .0620 ? 1.0650. If upnward breakdown does not take place, the pair will go to 1.0585 and 1.0570.It became known in the middle of the week that leading indicators index WestpacMelbourne increased to 0.6 points, to the level of 280.6 points, which indicates growth of 2.7% on annual basis and proves stability of economic outlook for the next 3-9 months.

Meanwhile, target value of the coincident indicators index is at the level of +2.9% y/y; while in April the growth was only by 0.3% y/y. At the moment it demonstrates downturn in the Australian economy in Q1. According to the Westpac estimates, scope of impact  of the natural disaster on the momentum of economic growth is becoming more obvious.   Minutes of the last meeting of the Reserve Bank of Australia was released yesterday; the document stressed that inflationary prospect in the country suggests further tightening; however recent macro-data does not encourage the rise in the rates. “Current inflation rate is partly due to the deflationary effects of the rise in interest rate and slowdown in the increase of expenditure for labour force,” stressed the document.

The AUD fell amid such background, since investors did not like uncertainty in the views of the RBA. Interest rate of the Reserve Bank of Australia is at the level of 4.75% per annum now; the next meeting is scheduled for 5 July and Westpac believes that the rise in the rates at this meeting is hardly probable.According to the data released last week, consumer confidence index Westpac in Australia fell by 2.6% m/m, to 101.2 points in June against preliminary forecast of decline by 1.3%, to 103.9 points.

In addition, a number of begun construction in Australia increased by 3.1% q/q in Q1, while the forecast had been -0.6%. it became known yesterday, that inflation expectations have remained at the level of May at 3.3% q/q in June. The head of RBA Mr. Stevens said earlier, that updated statistics will be available at the end of July; policy evaluation will be   based on it.

According to him, eventually, at some point, the rise in the interest rate will become a necessity to control prices, however at the last meeting the level required to raise interest rate has not been reached.At the same time the RBA does not worry about high rate of the AUD, on the contrary, Stevens noted that expensive AUD promotes economic adjustment. It is worth noting that the RBA intends to pursue preemptive tactic, therefore, the rates can be raised before autumn. So far, it runs counter to the macro-economic news.

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