AUD: Decline of Australian Dollar resumed with renewed force

The Australian Dollar rate resumed its decline at the Forex currency market on Tuesday under the pressure of external background.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD and it continues to go down, confirming a pair previous sell signal. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: in case of breakdown at the level of 0.9770 traders’ targets today will be the levels of 0.9720 and 0.9675.
Information background remains unchanged for Australia. Statistics, which is scheduled for publication this week, will be of minor importance; tomorrow for example, the data on completed construction costs will be released; on Wednesday - the index of the capital expenditure in private sector will become known.

Chief newsmaker for Australia is China – the country increased the level of reserve requirements for the banks for the fifth time this year, which suggests that the Celestial Empire intends to raise the level of the interest rate further. This is a negative signal for Australia and AUD.
According to the average forecast of economists and analytics the RBA is unlikely to raise interest rate before QIV of 2011. Current level of the interest rate is 4.75% per annum. The Australian Minister of Finance updated its budget forecast this week. Thus, GDP in 2011 is expected to be at the level of 3.5% (growth), in 2012 – 3.75% (unchanged). Net debt will amount to 6.4% by 2012. As for the employment sector- unemployment rate is expected to be at the level of 4.75% in 2011 and at the level of 4.5% in 2012.

It became known earlier that index of leading indicators remained unchanged in September which indicates some uncertainty in the producers and investors’ sentiments after the release of the minutes of the RBA meeting of 2 October, when the interest rate was raised unexpectedly. The document noted that interest rate was raised in order to facilitate the curb in the inflation rise, as mass investments in the mining sector, together with the increase in the employment sector supported the recovery of the national economy. The minutes of meeting emphasized that the balance of risks has shifted and in the current spectrum moderate tightening of the monetary policy seems reasonable.

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