AUD: Australian Dollar regains from the downfall to the local lows
The Australian Dollar rate is traded upward at the Forex currency market on Wednesday after testing local bottom at 0.9927, investors’ interest in the currency has partly revived, although to some extent, it is speculative.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, and is going down, while volumes are low, and is giving a sell signal. Stochastic Oscillator tends to go out of the oversold zone, and started to shape a buy signal.
Forex recommendations: in case of breakdown at the level of 1.0360, the pair will go to 1.0375 and 1.0400. If upward breakdown does not take place, the pair will consolidate close to the current levels.
Internal situation in the country’s economy remains almost unchanged.
Price index of houses in Australia fell by 0.1% q/q in Q2 against the forecast of reduction by 0.9% on quarterly basis.
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”.
It became known earlier that business activity index in the construction sector AIG in Australia fell by 0.3 points in July, to the level of 36.1 points.
Index of PPI in Australia increased by 0.8% on quarterly basis in Q2 against the growth of 1.2% in Q1. Business confidence NAB in Australia amounted to +6 points in Q2 against the prior value of +11 points. At the same time index of current conditions rose by 3 points against preliminary +2 points and assessment of business conditions in the three-month term increased by 10 points (forecast had been the growth of 15 points). CPI in Australia increased by 0.9% q/q ((+3.6% y/y) in Q2 against the forecast of growth by 0.7% q/q. This data turned out above expectations and supported growth in the pair AUD/USD. It is worth noting that business conditions index in Australia increased by 2 points in July, as per NAB estimates, against zero value in May. At the same time, business confidence index NAB amounted to 0 points against the level of +6 points in May, and GDP forecast for the fiscal year of 2011-2012 had been reduced to 1.7%
The Australian Dollar has quickly responded to the deterioration of the external background, which partly explains sales of the AUD. Position of the RBA has become an additional factor of pressure when it raised inflation forecast and lowered forecast of economic growth. Now the AUD is becoming a barometer of external instability- investors are unwilling to risk making purchases under instability of the market.
The Australian currency has reached levels that are very attractive for the purchase in the course of the ongoing sales, however one cannot be too careful, considering external environment.
