AUD/USD remains steady in light trade

Australian dollar traded steadily against its US counterpart on Wednesday after yesterdays report on durable goods orders from the United States, while trading volumes are expected to remain thin during Christmas holiday.

AUD/USD touched a session high at 0.8931 at 7:50 GMT, after which consolidation followed at 0.8923, dipping 0.05% for the day. Support was likely to be received at December 24th low, 0.8906, while resistance was to be met at December 23rd high, 0.8958.

According to a report released on Tuesday, durable goods orders in the United States rose 3.5% in November, supported by sectors such as aviation and transport. Experts had expected a lesser rate of increase, 2.0%.

Durable goods orders, excluding the volatile sector of transportation, climbed 1.2% in November, marking the strongest monthly pace since May.

Orders for core capital goods, a major gauge of business investment activity, surged 4.5% in November or the fastest pace since January, which spoke of increased economic sentiment in the country. Shipments of core capital goods, which are used to calculate quarterly Gross Domestic Product, increased 2.8% in November, significantly outstripping expectations for a 1.0% gain.

Octobers durable goods orders result has been revised up to a drop of 0.7% from a drop of 2.0% previously.

A separate report showed that new home sales in the country reached the annualized 0.464 million units in November, or a 2.1% decline in comparison with sales in October, as the latter have been revised up to 0.474 million units. Sales in October and November registered the strongest rate of increase since mid-2008. Analysts had projected that new home sales will reach the annualized 0.435 million units in November. On annual basis, new home sales jumped 16.6% in November, which suggested that housing market in the country was recovering, after rising mortgage rates caused a negative impact on home sales earlier this year.

Meanwhile, the Federal Reserve Bank said on December 18th that it intends to reduce its monthly bond purchases in January to $75 billion from $85 billion, while also reinforcing its position that the benchmark interest rate will remain low for an extended period of time. Banks policymakers will probably trim asset purchases in increments of $10 billion over the next seven meetings before ending the program in December 2014, according to economists in a Bloomberg News survey published on December 19th.

The number of initial jobless claims in the United States probably declined to 345 000 during the week ended on December 21st, according to the median estimate by economists, ahead of the release of the official report tomorrow. The number of claims was 379 000 in the preceding week.

Elsewhere, the Aussie was gaining ground for a fifth day against the kiwi dollar, with AUD/NZD cross up 0.1% to trade at 1.0915.