The RBA has left the key interest rate unchanged (4,75%) for the 6th month in a row.
In his cover letter the RBA Governor Glenn Stevens soften the inflation forecast as opposed the previous public commentaries given by the RBA. According to him, the price growth caused by unfavorable weather conditions should be over in the 2nd part of the year: the prices will start declining.
According to the RBA, the inflation will decline from 3,5% down to 3,25% by the end of 2011. Mr. Stevens assumes that high interest rates create unfavorable conditions for domestic business, which may provoke an economic slowdown. That is why the bank is not going to increase the interest rates in the near future.
Now most observers and market participants expect the central bank to leave the key interest rate unchanged till the end of 2011. However, some experts say that if the next quarterly inflation report shows that the inflation rate is higher than expected, the RBA well may raise the interest rate at the end of summer.
FOREX.
AUDUSD is under pressure. The experts from the Department of Masterforex-V trading system warn that the currency pair has come out of the bullish sloping channel, starting a potentially reversal down-swing against the main long-term trend.
A bearish FZR H2 and the “moment of truth” pattern of the same wave level may prompt the continuation of the mid-term retracement of Daily 1. The closest support levels will be found at 1,0587 and 1.0439. Another rally within the scope of the long-term uptrend can only take the form of the “Hound of the Baskervilles” pattern by Elder/MF (wave level H8). A bullish FZR will confirm the scenario. In this case 1,0774 will become a resistance level.
