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At the Forex currency market the Australian Dollar rate looks downward on Wednesday – the pair AUD/USD moved towards new lows the day before, then showed some correctional movement on rather stable external background. Today the Aussie’s selling continues.

Forex forecast: MACD indicator for the pair AUD/USD goes down in the negative area and is giving a sell signal; volumes are high. Stochastic Oscillator left the oversold zone and is rising slightly, giving a weak buy signal.

Forex recommendations: out of the market.

Feasible Forex scenario: in case of breakdown at the level of 0.9530, the pair will go to 0.9510 and 0.9490. If the breakdown does not take place, the pair will consolidate at the current levels.

According to the data released in the middle of the week, Retail sales in Australia increased 0.6% m/m in August against the same increase a month before. The fact that retail sales still do not show weakness is positive and may be supportive to the Aussie in the near-term.

As it became known today, AIG Services index in Australia decreased by 1.8 points to the level of 50.3 points in September against the increase by 3.3 points seen in August. Most likely it is a consequence of an overall slump in demand. As it became known the day before, Private sector credit in Australia totaled +0.2% m/m in August against +0.3% m/m in July. This became another reason for the Aussie selloff. Leading indicators index Westpac/MI in Australia increased by 1.4% in July, to the level of 284.2 points (+3.1% y/y) versus prior expectations of +2.7%. It became known earlier that consumer inflation expectations in Australia rose to 2.8% in September, as per estimates of Melbourne Institute against provisional estimate of 2.7%.

Another RBA meeting took place today at which the Bank decided to keep its cash rate unchanged at the level of 4.75%. So the pause in monetary policy tightening lasts for 11 months. In its minutes RBA noted that monetary policy might be eased in future if demanded by the inflation component. It also added that much time might be needed to analyze current market turbulence.

Apparently the rate will remain unchanged until Q1 2012. Let us remind that earlier JP Morgan economists revised its opinion on the Australian rate – now they do not await its 25 bps rise in 2012, forecasting the rate to remain at the current levels till the end of the next year. In accompanying comments the economists note that financial markets are too volatile and the risks of economy’s cooling are too big to speak of the rate increase. A fall is commodities prices also plays against Australia. 

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