AUD: Australian Dollar is in no hurry to accelerate its growth

The Australian Dollar rate continues to grow at the Forex currency market on Tuesday morning; however volumes of the rise are not too high, due to uncertainty of the external background and “wait -and- see” attitude of the majority of investors. 

Forex forecast: MACD indicator remains in the negative area for the pair AUD/USD, and started to make upward reversal, giving a buy signal. Stochastic Oscillator also reverses upward in the neutral zone; however its buy signal is weak at the moment. 

Forex recommendations: in case of breakdown at the level of 1.0470, the pair will go to 1.0490 and 1.0510.

If upward breakdown does not take place, the pair will stay close to the current levels.Calendar of Australian macro-economic developments is almost empty this week; the data on the price of new houses in July will be released on Wednesday, however they are of the secondary importance and will unlikely to affect the rate of the AUD. External background will remain the major driver for the pair AUD/USD.

According to the data released last week 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.

We would remind that according to the decision of the Reserve Bank of Australia interest rate in the country was left at the previous level of 4.75% per annum. In the follow-up comments, the head of the RBA, Mr. Stevens said that external uncertainty prevents the rise in the interest rate in Australia at the moment. He said that “it was agreed that it was reasonable to maintain current course of monetary policy especially taking into account acute sense of uncertainty at the financial markets recently. At the next meeting the RBA will continue to estimate varying prospects for growth and inflation”.

Minutes of the last meeting of the Reserve Bank of Australia which were 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 to 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.

At the same time expensive raw material in the world pushes the level of inflation upward. In addition, the document says that high exchange rate of the AUD and low level of households demand, have a restrictive effect on inflation. Among other things at the last meeting, arguments in favour of rate increase were suppressed by the downside risks to demand and high level of tension at the global financial sector.

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