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At the Forex currency market the Australian Dollar rate continues to decline today, since the market does not show any interest in risky positions.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, is going down and is ready to cross the signal line from top to bottom, giving a sell signal. Stochastic Oscillator has reversed in the neutral zone, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0500, the pair will go to 1.0470 and 1.0450. If downward breakdown does not take place, the pair will consolidate at the current levels.

It became known today that inflation expectations in Australia in June remained at the May level at 3.3%.

According to the data released this week, consumer confidence index Westpac in Australia fell by 2.6% m/m, to 101.2 points in June against preliminary forecast of decline by 1.3%, to 103.9 points. In addition, a number of begun construction in Australia increased by 3.1% q/q in Q1, while the forecast had been -0.6%.

As it was announced earlier inflation in Australia increased by 0.2% m/m (+3.3% y/y), as per TD Securities estimates. It is the weighted average inflation index which is a guideline in decision making for the Bank of Australia, and it is slowing down its growth rate now (in April: +0.3% m/m), indicating that prospects of the increase in the interest rate in the coming months are slipping away.

The Reserve Bank of Australia left interest rate at the previous level of 4.75% per annum and stressed that current course of policy is quite acceptable, which triggered sales of the AUD because it might mean that monetary policy tightening will continue to be suspended in the next few months.

Yesterday, the head of RBA Mr. Stevens said that a new statistics will be available at the end of July and evaluation of policy will be   based on it. According to him, eventually the rise in the interest rate will become a necessity at some point to control prices, however at the last meeting the level required to raise interest rate has not been reached.

Thus, the Reserve Bank of Australia has confirmed its previous hawk opinion, despite the pause in the interest rate rise which has lasted for 6 sessions.

At the same time the RBA does not worry about high rate of the AUD, on the contrary, Stevens noted that expensive AUD promotes economic adjustment.

It is worth noting that the RBA intends to pursue preemptive tactic, therefore, the rates can be raised before autumn.

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