AUD: Australian Dollar is on sale on Thursday

At the Forex currency market the Australian Dollar rate continues to fluctuate sluggishly on Thursday morning; The AUD is being sold today, the same as the night before.

Forex forecast: MACD indicator remains in the negative area for the pair AUD/USD, and started upward reversal, giving a buy signal, while volumes are below average. 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 1.0480, 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.

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. It became known yesterday that price index for corporate services in Australia remains unchanged on monthly basis, -0.5% y/y in July against the level of -0.8% y/y in June. In addition, index of leading indicators Conference Board in Australia fell to -0.8% in June; while a month earlier it had amounted to -0.1%.

According to the Minutes of the last meeting of the Reserve Bank of Australia which was made public earlier leading economic indicators demonstrated moderate increase in employment, and if the world financial turmoil would continue, it could become a factor of pressure on 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. 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 the rate increase were suppressed by the downside risks to demand and high level of tension at the global financial sector.

External environment is still determinative for the AUD and the lack of volumes in the pair indicates that investors have adopted wait and see position.

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