AUD: Australian Dollar goes down

At the Forex currency market the Australian Dollar rate continues to lose positions on Tuesday, largely due to traders’ risk aversion which is not only preserved but is increasing.

Forex forecast: MACD indicator remains in the negative area for the pair AUD/USD, and is growing, giving a buy signal, while volumes are still insignificant. Stochastic Oscillator has come into the oversold zone, maintaining a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0510, the pair will go to 1.0490 and 1.0470. If downward breakdown does not take place, the pair will consolidate at the current levels.

At the meeting of the Reserve Bank of Australia which was held today, it is decided to leave the cash rate unchanged at 4.75% per annum, as expected. 

In the follow-up comments the head of the RBA Glen Stevens noted that “medium term economic prospects look worse that it had been expected a few months earlier. Global financial markets demonstrated severe instability”. The situation with the rate seems logical amid such background.  “The RBA Committee decided that the most viable option will be to maintain current course of the monetary policy. At the next meeting the RBA will continue to carefully analyze both the prospects for economic growth and inflation in Australia, –said Stevens.

The pause in the policy of monetary tightening, maintained by the RBA, has been going on for 9 months already.

Statistics released on Tuesday showed that mortgage lending in Australia increased by 1.0% m/m in July against the growth of 0.6% m/m in June. In addition, current account balance in Australia amounted to -A$7.4 billion in Q2 against the level of -A$11.1 billion in Q1.

At the same time, activity index in the service sector AIG/CBA in Australia increased by 3.3 points, to the level of 52.1 points. On the other hand, number of vacancy announcements ANZ in Australia fell by 0.6% m/m in August against similar decline in July. Consumer lending in Australia increased by 0.2% m/m in    July against the decline of 3.6% m/m in June; Although it is a good indication, it is too early to speak about tendency.

Leading indicators index 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.