Forex Blog
Blog-FX.Com

The Australian Dollar rate continues to remain under pressure at the Forex currency market, shifting local lows to the level of April.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD, after breaking through the signal line from top to bottom earlier, it goes down gradually, giving a sell signal. Stochastic Oscillator is going down in the neutral zone, giving a weak sell signal, and closely approaching oversold area.

Forex recommendations: in case of breakdown at the level of 1.0400, the pair will go to 1.0370 ? 1.0350.

Interesting situation is taking shape in the index swap Overnight: Investors’ opinion is reflected on the rate which can reach the level of  4.515 by December this year, and taking into account that the rate is now at 4.75% per annum, market incorporates a chance that interest rate will go down amid deterioration of the global situation.

However, these actions of the investors can force the Reserve Bank to make an opposite decision.According to the data released last 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%. It became known yesterday, that inflation expectations have remained at the level of May at 3.3% q/q in June.

We would remind that vice president of the Reserve Bank of Australia Mr. Low, stressed last week that special efforts are required to maintain low and stable level of inflation. According to him previous growth of CPI was attributed mostly to the external factors and influence of the currencies’ exchange rates was insignificant.He also noted that very little unused spare capacity is left in the economy, and the upward pressure on inflation was caused by such facts as labour costs and growing prices for utilities.

Minutes of the last meeting of the Reserve Bank of Australia was released earlier; the document stressed that inflationary prospect in the country suggests further tightening; however recent macro-data does not encourage the rise in the rates. “Current inflation rate is partly due to the deflationary effects of the rise in interest rate and slowdown in the increase of expenditure for labour force,” stressed the document.

The AUD fell amid such background, since investors did not like uncertainty in the views of the RBA.Interest rate of the Reserve Bank of Australia is at the level of 4.75% per annum now; next meeting is scheduled for 5 July and Westpac believes that the rise in the rates at this meeting is hardly probable.

Tags: