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AUD: Australian Dollar is being sold out following decision of RBA
At the Forex currency market the Australian Dollar rate is being sold out on Tuesday, following the decision of the Reserve Bank of Australia to decrease interest rate
Forex forecast: MACD indicator for the pair AUD/USD is in the negative area and is going up, while volumes are low, giving a buy signal. Stochastic Oscillator is going down in the neutral zone, giving a sell signal.
Forex recommendations: in case of breakdown at the level of 1.0160, the pair will go to 1.0150 and 1.0120.
Thus, at the meeting today, the Reserve Bank of Australia reported that interest rate was decreased by 25 basis points, to 4.25% per annum. In the follow-up comments the RBA said that currently, inflationary forecast enables to decrease the rate gradually because in 2012-2013 CPI will be probably in the range of 2-3%.
The RBA also stressed that crisis in Eurozone and slow down in the Chinese economy adversely affect Australia; in addition, probability of further slowdown in the world economy also intensifies.
The next meeting of the Reserve Bank of Australia will be held only in February, so lowering of the rate can be partly explained by the fact that the regulator wanted to secure the situation before summer holidays (according to Australian seasons).
It became known earlier that Australian authorities have revised forecast of GDP growth downward, to 3.5% in 2012. Previously, forecast had been at 3.75%
Financial situation in the country is ambiguous: previous statistics showed that lending in the private sector of Australia increased by 0.2% m/m (+3.5% y/y) in October against the forecast of growth of 0.4% m/m. Previous block of statistics demonstrated that leading indicators index CB in Australia increased by 0.1% m/m in September against a previous decline of 0.2% m/m. Corporate profit and exports of agricultural products were among the main drivers of the increase in the index. New statistics does not cancel downward pressure, and the main reason for this was caused by changes in prices for securities at the stock market. Retail sales in Australia increased to the minimum value of +0.2% m/m over 4 months in October. In September the index rose by 0.4%, and by 0.6% in August.
