AUD: Australian Dollar goes up steadily

At the Forex currency market the Australian Dollar rate continues to grow steadily on Wednesday.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to decline, giving a pair sell signal; while volumes are slightly above the average. Stochastic Oscillator is going up in the neutral zone and has already reached overbought zone, giving a pair buy signal.

Forex recommendations: in case of breakdown at the level of 1.0870 the pair will go to 1.0890 and 1.0910. If upward breakdown does not take place, the pair will consolidate close to the current levels.

Statistics released earlier showed that trade balance in Australia rose to A$1.74 billion in March against the level of -A$0.08 billion in February. At the same time agency Moody's Investors Service gave a positive assessment to the data; according to observers of the agency, resolution of the authorities to revert the balance of the state budget to the zone of surplus is well-founded and such attitude supports credit rating of the country at Aaa.

Note that the rise in the indicator was caused by the growth of exports in iron ore and coal and also reduction of gasoline imports.

As it was made public last week, CPI in Australia increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs; natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate. RBA expects that net CPI will reach 3% against predicted 2.75% by the end of this year.

Exports increased by 9% to A$25 billion in March; import rose by 1%. It became known earlier that index of import prices increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia has been keeping interest rate unchanged for a long time. Last week, the Reserve Bank of Australia outlined its vision of the prospects for the national economy. Thus, next week the RBA will announce measures to reduce government costs in order to restore budget surplus. If the program is implemented it will help Australia to maintain GDP growth, which has been observed over the past 20 years, and will also help curb inflation.  

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