AUD: Australian Dollar tends to move upward
At the Forex currency market the Australian Dollar rate continues to grow moderately today.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to go down, giving a pair sell signal, while volumes are below average. Stochastic Oscillator is growing in the neutral zone, giving a pair buy signal.
Forex recommendations: in case of breakdown at the level of 1.0640 the pair will go to 1.0655 and 1.0670. If upward breakdown does not take place, the pair will consolidate at the current levels as yesterday.
The Australian economy has not changed dramatically this morning.
Statistics which was made public 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. Moody's Investors Service agency gave 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, which is at Aaa.
Note that the rise in the indicator was caused by the growth of exports of iron ore and coal and also by the reduction of gasoline imports.
Note also that the level of CPI in Australia rose by 1.6% on quarterly basis (+3.3% y/y) in QI.
The minutes of the Reserve Bank of Australia meeting of 3 May which was made public today stated that growing Australian Dollar has assisted to curb inflation; while interest rate remains at the previous level of 4.75% per annum.
The RBA admits that if economic situation will develop according to expectations, interest rate increase will become flagrant necessity.
The minutes of the meeting was vague while describing the state of the labor market in the country; it is not clear yet in which way the growing wages will impact on the tightening of the labor market conditions. At the same time sentiments of the households and labour market will be important factors for determining dynamics of inflation for the coming years.
It became known in the middle of the week that index of wage cost in Australia rose by 0.8% on quarterly basis (+3.8% y/y) in QI, while the forecast of growth was by 1.1% q/q,. The market had been waiting for the index, as earlier it had almost reached the significant level of 4% y/y. Now the concern of investors about the discrepancy between labor cost and index of inflation will go down.
However, the data may well affect the decision of the RBA in June, forcing the regulator to extend the pause in the interest rate increase.
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