Forex analytics of LiteForex of 26.10.2010: AUD: Australian dollar is growing steadily on Tuesday

On Tuesday in the currency market (forex) AUD continues to grow steadily the third session in a row approaching the parity in pair with USD.

Forex (forex) Forecast: MACD indicator is in the positive area for the AUD / USD pair and it increases which confirms previous signal to buy the pair. The signal of stochastic oscillator is the same today.

Forex (forex) recommendations: today the targets of the buyers will be 0.9940 and 0.9985.

Today it became known that the Business Confidence Index in Australia increased up to 9 in the III quarter NAB against the level of 3 in the II quarter.

The situation in the Australian economy remains stable. 

Last week the text of the RBA meeting report of 5 October was published. The text explains the reasons of the regulator’s decision to keep interest rates unchanged at the level of 4.5%.
Thus according to the RBA at the moment the pause is a symbol of flexibility of monetary policy and the regulator stresses that the decision was thoughtful and measured. Also risks for the economy as well as for the AUD growth were taken into account which ultimately will impact on the inflation.

According to the regulator the inflation will remain in the target range in the short term and will reach the level of 2.75% by the end of the year. The Bank expects inflation near 3% by mid-2012.

The growth of the economy should increase and be strengthened by 4% in two years from the current 3.25%. The market believes that the probability of new rate growth at the next meeting in November is 34%, in December - 52%. 

It became known that Westpac leading index in Australia dropped to 0.1% m / m in August against the decline by 0.3% in July. However AUD ignored this information.
 
The head of the Reserve Bank of Australia Stevens has said at the beginning of the week that the complete elimination of imbalances in the economy will take some time as the global economy needs a strong and sustainable demand. Against such background the changes in the currency market will only perform the function of redistribution of growth of the global economic system. 

Stevens has also noted that the increase in flexibility of the yuan will help to work on sharpening of imbalances. Thus Australian politician took the view of the USA.