AUD: Australian Dollar rate is soaring

At the Forex currency market the Australian Dollar rate grows steadily, continuing the trend of the last two days. Stable external background and oil acted as a support. 

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD, and it is moving along the signal line, not giving a clear sgnal. Stochastic oscillator is giving a pair buy signal, being in the neutral zone.

Forex recommendations: in case of breakdown at the level of 0.9800 the pair will go to 0.9840 and further to 0.9880.
Growth of the AUD can be limited today in advance of statistics on the U.S. labour market which is going to be released tonight.

The situation in Australia seems stable – it is not expected that the interest rate will be increased in the nearest future, since economic growth rate has slowed down in the second half of 2010; The RBA stressed on Friday that the rate will be reviewed not earlier than in May next year (earlier the growth had been expected in February).  Interest rate in Australia is at the level of 4.75% now.

As it became known yesterday retail sales in October amounted to-1.1% m/m against +0.1% in September and trade balance surplus in October was $2.625 billion.

It also became known earlier that current account balance amounted to -?$7.83 billion in QIII against the forecast of -?$6.60 billion. All these factors will buck against the AUD.

The level of capital expenditures in Australia increased by 6.2% on quarterly basis in QIII as per Capex estimations against the previous reduction by 4%. Economists’ forecast amounted to +3.1%, which confirmed high level of confidence to the Australian economy.

However the data released earlier was not so unambiguous – index of leading indicators CB reduced by 0.1% n September against +0.2% in August; volume of completed construction in QIII declined by 2.1% against the forecast of growth by 2.0%.

It became known yesterday that GDP in Australia increased by 0.2% on quarterly basis in QIII; while analytics had expected the rise by 0.5%. The growth over last quarter positioned as the lowest over the last two years, therefore GDP dynamics seems to be descending.
However, the Australian Dollar rate can resume the decline in the medium term because investors’ concern about problems in Eurozone is still strong and the Euro is still too weak. The AUD has “lost weight” by 3.6% last week in pairing with the USD.   

 

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