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At the Forex currency market the Australian Dollar rate continues to slide down on Friday morning: investors’ interest in high-yield and consequently, high risky currencies is very low, due to traders’ increasing concerns about global economy.

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 has come out of the overbought zone and is going into neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0340, the pair will go to 1.0310 and 1.0280. If upward breakdown does not take place, the pair will stay close to the current levels.

Thus, Australian Dollar is highly responsive to the changes in the external background.

According to the data released this week, index of leading indicators Westpac in Australia increased by 0.2% m/m (+1.6% y/y) in June against the growth of 3.0% y/y in May. However, the rate of index’s decline is minimal, considering that the index has been steadily decreasing since 2010. This index indicates prospects for economic activity for the next 3-9 months and judging by its dynamics, rapid growth can be hardly expected.

Minutes of the last meeting of the Reserve Bank of Australia which were made public earlier showed that leading economic indicators demonstrated moderate increase in employment, and if the world financial turmoil would continue, it could become a factor of pressure to household spending and sentiments in the business circles, which in its turn, would have a negative impact on the general projections of the Central Bank. At the same time expensive raw material in the world pushes the level of inflation upward. In addition, the document says that high exchange rate of the AUD and low level of households demand, have a restrictive effect on inflation. Among other things at the last 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.

We would remind 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”.

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