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AUD: Downward rollback of Australian Dollar gains strength
At the Forex currency market the Australian Dollar rate continues to go down on Wednesday regaining from yesterday’s RBA decision.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and it is moving along the signal line, not giving a clear signal. Stochastic Oscillator is coming out of the overbought zone today, is going to create a pair sell signal
Forex recommendations: in case of breakdown at the level of 1.0075 the pair will go to 1.0040 and 0.9980.
The following Australian data was released today:
– sales on new houses HIA increased by 2.5% m/m in January against -0.6% m/m in December;
– GDP rose by 0.7% q/q (+2.7% y/y) in QIV against the forecast of +0.6% q/q (+2.8% y/y).
Surprisingly, however the AUD did not halt its decline after the data release.
At the meeting yesterday, the Reserve Bank of Australia decided to keep interest rate unchanged, at the level of 4.75% per annum, which was not a surprise to the market. In the follow-up comments the RBA mentioned that production is still decreasing in the country due to the elimination of the consequences of the disaster, which befell on Australia at the beginning of the year. The rise in lending is also insignificant.
Finance Minister of Australia Mr. Swan described the rate decision as “good news”, clarifying that echoes of disaster can affect the result of QI, while fundamentals in Australia remains steady. In accordance with the RBA, inflation forecast for this year is in the range of 2-3%.
It became known earlier that the level of total lending in Australia increased in January by 3.3% per annum, as per estimates of the Reserve bank of Australia, against expectations of the rise by 3.2%.
Earlier the head of the Reserve Bank of Australia Glenn Stevens noted that he expected stabilization of national economy, and consequently, interest rate would remain unchanged for some time. He also said that economic growth of Australian economy could be better, than the forecast despite negative impact of the natural disaster that befell the country at the beginning of the year. At the same time Stevens believes in the support from strong economies of India, China, the USA, and risks – from the European economies.
Worth noting that the level of capital expenditure in private sector of Australia increased by 1.3% on quarterly basis in QIV last year, reaching the level of A$29.691 billion. Thus, in accordance with the forecast, total index of capital expenditures will be at the level of A$128.93 billion in 2010-2011.
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