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At the Forex currency market the Australian Dollar rate continues to grow on Monday; the AUD has been strengthening for the fifth consecutive session without correction, indicating that traders are full of determination.

Forex forecast: MACD indicator for the pair AUD/USD is in the negative area and is moving along the signal line, not giving a clear signal. Stochastic Oscillator continues to go up in the neutral zone, giving a buy signal and approaching overbought zone.

Forex recommendations: in case of breakdown at the level of 0.9835, the pair will go to 0.9850 and 0.9860. If upward breakdown does not take place, the pair will consolidate at the current levels.

Macro-economic background in Australia remains unchanged. According to statistics released earlier business activity index in the manufacturing sector of Australia fell to 42.3 points in September against the previous level of 43.3 points. Most likely it has been the impact of the general recession in demand. According to the data released in the middle of the week, retail sales in Australia grew by 0.6% m/m in August versus similar growth a month earlier.

As it became known earlier composite activity index in the construction sector AIG in Austraial fell by 2.1 points, up to 30.0 points in September. Consumer lending in Australia amounted to +0.2% in August against the level of +0.3% m/m in July. It has become another reason for selling the AUD. Index of leading indicators Westpac/MI in Australia increased by 1.4% in July, to the level of 284.2 points (+3.1% y/y) against preliminary expectations of +2.7%. As it became known earlier consumer inflation expectations in Australia increased to 2.8% in September, as per Institute of Melbourne against provisional estimate of 2.7%.

At the regular meeting last week the Reserve Bank of Australia decided to leave interest rate unchanged at the level of 4.75% per annum. Thus, the pause in the process of monetary tightening policy of the RBA has been lasting for 11 months. In the follow-up comments the regulator said that monetary policy can mitigate in the future if inflation requires it.

In the follow-up statement it is noted that more time can be required to analyze the impact of turbulence in the markets. Apparently, the rate of the RBA is unlikely to be raised until the first quarter of 2012. Comments stressed that financial markets are too volatile and risks of slowdown in the world economy is too high to think about the rise in the rates. Decline in the prices for raw materials is also a negative factor for Australia.

Recall that JP Morgan revised its view on the interest rate of Australia- economists do not expect the growth of rate by 25 basis points in 2012, predicting that the interest rate will remain at the current level until the end of the next year.

Meanwhile the Australian Dollar is taking advantage of the lull at the market to regain partly its previous losses.

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