AUD: Weak statistics has spurred sales of Australian Dollar
At the Forex currency market the Australian Dollar rate continues to fall on Thursday, affected this time by the negative reaction of the economists on the Australian statistics, released this morning.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, however it moves along the signal line, although trading volumes are still high. Stochastic Oscillator goes down in the neutral zone and is giving a pair sell signal.
Forex recommendations: in case of breakdown at the level of 1.073, levels of 1.0710 and 1.0690 will become the target of decline.
The following Australian statistics was released today:
– Retail sales fell by 0.5% m/m in March against the growth by 0.8% in February;
– Number of construction permits rose by 9.1% m/m in March against the decline by 5.3% in February.
Stress of the economists was caused by the data on the retail sales: the indicator went down because sales in the department stores and super markets had been reduced. Interestingly that it is happening during long period of discounts in many stores.
It became known yesterday that sale of new houses in Australia increased by 4.3% m/m in April, as per HIA estimates versus preliminary expectations of growth by 0.6% m/m. In addition, index of business activity in the service sector of Australia rose to 51.5 points in April, as per estimates of AIG/Commonwealth Bank, against the previous level of 46.5 points. However, the AUD disregarded this statistics.
According to the data released last week CPI in Australia increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs; natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate.
Kevin Rood, Minister of Foreign Affairs in Australia said earlier that RBA has no plans to carry out currency intervention, although national currency is considerably overvalued.
As it was made public earlier, index of import prices increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia keeps interest rate unchanged for a long time. Leading indicators index demonstrates good growth in the Australian economy: indicators show that growth is unlikely to be too high next year; however there will be some growth.
The Reserve Bank of Australia decided to leave interest rate at the previous level of 4.75% per annum. At the same time the RBA was not too eloquent in the follow up comments – and this was the indication for investors to start sales.
The RBA has maintained the rate unchanged for the fifth meeting in a row; the last fact of monetary policy tightening took place in November 2010.
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