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At the Forex currency market the Australian Dollar rate continues to remain under pressure on Tuesday, which was caused by the positions of the RBA this time.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, and goes up, giving a buy signal. Stochastic Oscillator has come out of the overbought zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0890, the pair will go to 1.0870 and 1.0850. 

According to the decision of the Reserve bank of Australia, interest rate in the country was left at the previous level of 4.75% per annum. In the follow-up comments, the head of the RBA, Mr. Stevens said that external uncertainty prevents the rise in the interest rate in Australia at the moment. He said that “ it was agreed that it was reasonable to maintain current course of monetary policy especially taking into account acute sense of uncertainty at the financial markets recently.

At the next meeting the RBA will continue to estimate varying prospects for growth and inflation”.In addition, the data released earlier showed that price index of houses in Australia fell by 0.1% q/q in Q2 against the forecast of reduction by 0.9% on quarterly basis.Lending in the private sector of Australia declined by 0.1% m/m (+2.7% y/y) in June, while the forecast had been +0.4% m/m.

At the same time mortgage lending increased by 0.3% m/m last month against the growth of 0.5% in May.CPI in Australia increased by 0.9% q/q ((+3.6% y/y) in Q2 against the forecast of growth by 0.7% q/q. This data turned out above expectations and supported growth in the pair AUD/USD. It is worth noting that business conditions index in Australia increased by 2 points in July, 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%Index of PPI in Australia increased by 0.8% on quarterly basis in Q2 against the growth of 1.2% in Q1. Business confidence NAB in Australia amounted to +6 points in Q2 against the prior value of +11 points.

At the same time index of current conditions rose by 3 points against preliminary +2 points and assessment of business conditions in the three-month term increased by 10 points (forecast had been the growth of 15 points). According to the NAB estimates the gap between strong and weak sectors of Australia is reaching historic maximum and reminds of the situation in 2000 when slowdown occurred in the weak links of the economic chain. Index of industrial activity AIG PMI in Australia fell by 9.5% in July, to 43.4 points against the previous level of 52.9 points. At the same time, sales of new houses in Australia fell by 8.7% m/m in June, as per HIA estimates, against the decline of 0.2% in May.    

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