AUD: Growth of Australian Dollar is supported by external background today

The Australian Dollar rate is supported by the external background and news that Ireland will receive assistance from EU and IMF in the amount of 80-90 billion euro, which relieves stress at the market.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and it goes up, giving a apir buy signal. Stochastic Oscillator is giving a similar signal today, being in the overbought zone.

Forex recommendations: if external background is maintained and in case of breakdown at the level of 0.9970, buyers' targets will be the levels of 1.0000 and 1.0050.

Since oil prices began to recover this morning following the fall by 4% last week, the AUD has also received support from the raw material market as
well. The situation in the Australian economy still remains unchanged; and indistinct dynamics of the pair AUD/USD at the Forex currency market can be explained by the ambiguity actions of the nearest neighbor and partner-China.

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.

Note that China 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.

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