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• Rouble is losing positions again in pairing with USD and EUR [11/10/2011]
• NZD: New Zealand Dollar is descending [11/10/2011]
• AUD: sales of Australian Dollar do not subside [11/10/2011]
• JPY: Japanese Yen remains in the narrow trade range [11/10/2011]

AUD: Fall of Australian Dollar accelerates due to external news

The Australian Dollar rate accelerated its fall at the Forex currency market on Tuesday, as soon as the news about flooding in Queensland, which seemed to cause massive damage, became known. Although exact numbers are not known yet, traders expect reaction from the Reserve Bank of Australia. The fact that the pair is locally oversold has become another catalyst of such rapid rollback of the pair.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to ascend, confirming a previous buy signal for the pair. Stochastic oscillator has come out of the overbought zone today and is giving a pair sell signal.

Forex recommendations: if bearish sentiments among investors will intensify for the pair and in case of breakdown at the level of 1.0060, traders’ targets will become the levels of 1.0040 and 1.0020. More distant target is the parity level.

Thus, flooding which took place in Australian Queensland which is rich in natural resources, prompted sale of the pair AUD/USD as investors now await the reaction from RBA.

Now the prospects of the regulator’s actions are quite vague; if earlier accuracy of the forecast was obscure due to the upcoming rise in the raw materials prices, caused by crop damage, now a fact of natural disaster was added to this list.

The minutes of the RBA meeting of 7 December which was made public last week, showed that the rate was left unchanged, since the regulator believes that current situation can be described as moderately restrictive, because consumers are cautious, while inflation pressure does not intensify. The interest rate in Australia is now at the level of 4.75% per annum. The document reported that households might continue to rein in spending and in this case it will lead to the short term rise in inflation and also to the lack of aggregate demand in economy.

The RBA meetings in 2011 are scheduled for: 31 January, 28 February, 4 April, 2 may, 6 June, 4 July, 1 August, 5 September, 3 October, 31 October, 5 December.

Note that correction for the AUD had started twice already, however both times it did not extend, due to the investors’ demand for the high-yielding currencies. It is quite possible that (if the RBA reaction to the natural disaster will be adequate) later the AUD will continue moderate consolidation.

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