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At the Forex currency market the Australian Dollar rate tends to recover on Tuesday after three days of sales.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, and started to decline, giving a sell signal; however volumes are still low. Stochastic Oscillator is going down in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0600, the pair will go to 1.0550 and 1.0530.

If downward breakdown does not take place, the pair can rise to 1.0645/50 as part of the corrective rebound.Growth of the AUD was prevented by the publication of minutes of the July’s meeting of the Bank of Australia - according to document the RBA needs time to evaluate the dimension of the inflationary pressure and the next CPI report will determine the direction of the monetary policy.

In addition, the minutes state that economic prospects are still positive in the medium term and as a whole, labor market does not demonstrate signs of recession. Thus, the RBA did not give any indications as when tightening of the monetary policy could commence.At the meeting two weeks ago, the Reserve Bank of Australia decided to leave interest rate at previous level of 4.75% per annum and according to the comments of the regulator, moderately restrictive monetary policy is consistent with the actual situation. 

According to the RBA, the base rate will rise very gradually and economic growth in 2011 will be slower than expected. As the data released last week showed, business conditions index in Australia increased by 2 points in Jule, 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%.

According to the data released earlier, consumer inflationary expectations MI in Australia rose to 3.4% in July against the level of 3.3% in June. The AUD has not really reacted to the data, focusing its attention on the Chinese statistics and forecasts.Vice president of the Reserve Bank of Australia Mr. Low stressed earlier 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.

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