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At the Forex currency market the Australian Dollar rate is traded downward on Tuesday; after three days of growth the AUD failed to gather enough strength to withstand changing market sentiments.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, and is going down, while volumes are average, and is giving a sell signal. Stochastic Oscillator goes up in the neutral zone, approaching to oversold zone and is giving a buy signal.

Forex recommendations: off the market.
 
Feasible event scenario at Forex: in case of breakdown at the level of 1.0480, the pair will go to 1.0490 and 1.0520. If upward breakdown does not take place, the pair will stay close to the current levels and will tend to rollback to 1.0430.
 
Today, minutes of the last meeting of the Reserve Bank of Australia was made public, according to which leading economic indicators demonstrate moderate increase in employment, and if the world financial turmoil will be continued, it will become a factor of pressure for household spending and sentiments in the business circles, which in its turn will have a negative impact on the general projections of the Central Bank.

In addition, the document states that high rate of the Australian Dollar and low level of demand in households can act as deterrent force for the inflation. At the same time expensive raw material in the world pushes level of inflation upward.

Among other things at the meeting, arguments in favour of rate increase were suppressed by the downside risks to demand and high level of stress at the global financial exchanges.

Recall that according to the decision of the Reserve Bank of Australia interest rate in the country was left at the previous level of 4.75% per annum. In the follow-up comments, the head of the RBA, Mr. Stevens said that external uncertainty prevents the rise in the interest rate in Australia at the moment. He said that “it was agreed that it was reasonable to maintain current course of monetary policy especially taking into account acute sense of uncertainty at the financial markets recently. At the next meeting the RBA will continue to estimate varying prospects for growth and inflation”.

In other respect, macro-economic background has not changed much.
 
It became known yesterday that business activity index in construction sector AIG in Australia increased by 0.3 points, up to 36.q points in July. Price index for houses in Australia fell by 0.1% q/q in Q2 against the forecast of reduction by 0.9% on quarterly basis. According to the data released earlier, employment rate in Australia decreased by 0.1 thousand in July against expectations of growth by 10.3 thousand. Unemployment rate in the country rose unexpectedly, up to the highs of eight months, and amounted to 5.1%; while in June the index remained at the level of 4.9%.

Index of PPI in Australia increased by 0.8% on quarterly basis in Q2 against the growth of 1.2% in Q1. Business confidence NAB in Australia amounted to +6 points in Q2 against the prior value of +11 points. At the same time index of current conditions rose by 3 points against preliminary +2 points and assessment of business conditions in the three-month term increased by 10 points (forecast had been the growth of 15 points). CPI in Australia increased by 0.9% q/q ((+3.6% y/y) in Q2 against the forecast of growth by 0.7% q/q. This data turned out above expectations and supported growth in the pair AUD/USD. It is worth noting that business conditions index in Australia increased by 2 points in July, as per NAB estimates, against zero value in May. At the same time, business confidence index NAB amounted to 0 points against the level of +6 points in May, and GDP forecast for the fiscal year of 2011-2012 had been reduced to 1.7%.

Therefore, it is getting more evident that Australian economy is losing momentum to growth and is slowing down.

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