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The Australian Dollar rate continues to decline at the Forex currency market in the middle of the week.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, and is moving along the signal line, not giving a clear signal. Stochastic Oscillator goes down in the neutral zone, coming closer to the oversold zone and giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0710, the pair will go to 1.0680 and 1.0650.

The following Australian data was released today:

– Volume of retail sales declined by 0.1% in June against the fall of 0.6% earlier

– Business activity index AIG in the service sector increased by 0.3 points in June, to the level of 48.8 points.

Retail sales are in the negative balance of the country, although demonstrating good dynamics. The AUD is still under pressure and it leads the pair AUD/USD down, below 1.06.

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.

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.

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