AUD: Australian Dollar tends to strengthen

At the Forex currency market the Australian Dollar rate is growing on Tuesday, supported by quiet external background

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to go down, however at the moment it is moving along the signal line and is not giving a clear signal. Stochastic Oscillator has come into overbought zone and is giving a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0720 the pair will go to 1.0730 and 1.0750. If upward breakdown does not take place, the pair will consolidate at the current levels. There is high possibility that aggressive sellers will be back for the pair.

The following Australian data was released today:

– Construction permits decreased to -1.3% m/m in April;

– Balance of current account in Australia amounted to -A$10.447 billion in QI.

The minutes of the Reserve Bank of Australia meeting of 3 May which were made public earlier 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 an obvious necessity.

Representative of the Reserve Bank of Australia Mr. Batellino noted yesterday that growth of the Australian Dollar is a direct reflection of the situation in the global economy. “It is difficult to change this situation, so some sectors of the economy will suffer from high exchange rate of the currency” –he stressed. However, he clarified that growth in inflationary pressure is natural amid recovery of the global economy.

It became known earlier that leading indicators index in Australia increased by 1.5% m/m in March, to the level of 284.5 points, while annual gain is assessed at 5.3%. Index of coincident indicators rose by 0.7% (+2.0% y/y) in March.

Westpac believes that growth rate of the leading indicators, which helps to assess economic prospects for the next 3-6 months, has stabilized, and shows moderate rate of recovery in the Australian economy.  “The results of the first half of the year might be not the best, due to slowdown in the pace of development in QI, which was caused by weakness in external sector and wholesale inventories”, pointed Westpac.

 

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