Australian business environment index rose by 2 points, up to +12 in June, which is far above medium-term average value of +1. At the same time business confidence index rose by 3 points, up to +6 in June against the decline in May.

Recent decrease in the Australian interest rate to 1.75% has a positive impact on business optimism in the country.

Although the AUD sharply fell after the UK referendum and also because Rating Agency Standard and Poor's has downgraded Australian credit rating AAA from stable to negative, the pair AUD/USD has been steadily growing.

Interest rate in Australia remains one of the highest in the world, and Australian economy is one of the most stable in the world, despite slowdown of inflation and GDP in the country. Australian economy has not been facing recession for the past 24 years, which is a record for the advanced economy.

Today, Australian dollar is growing on anticipation of new measures to stimulate Japanese economy. Prime Minister of Japan, Shinzo Abe promised to take decisive stimulus measures to support Japanese economy. And we know that Japan is the largest trading partner of Australia.

Now, in view of the improvement in the index of business environment in the country, RBA may delay with the decision to decrease in the key interest rate at the meeting in August.

Given that the US Fed tends to soften monetary policy, the pair AUD/USD can continue to rise in the short and medium-terms.

AUD/USD: Conditions for business have improved in Australia.  Fundamental analysis for 12.07.2016

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