AUD/USD has posted gains on Wednesday, as the pair trades at the 0.79 line. In Australia, Construction Work Done posted a decline of 0.2%, well above expectations. Wage Price Index gained 0.6%, matching expectations. In the US, Federal Reserve head Janet Yellen continues a second day of testimony in Congress. We’ll get a look at New Home Sales during the day, with the markets expecting a softer reading in the January report.
Janet Yellen testified before a Senate committee on Tuesday, saying that the Fed was “unlikely” to raise interest rates in the next few months, given current economic conditions. Her remarks seemed aimed at quelling rising speculation about a rate hike sometime in mid-2015, which has helped boost the US dollar’s performance against its major rivals. Yellen noted that the continuing growth should lead to the unemployment rate continuing to fall. The Fed Chair will resume testimony before the House Financial Services Committee on Wednesday, but it’s not likely that Yellen will say anything which will shake up the markets.
The Australian dollar has moved higher on Wednesday, taking advantage of Australian data. Construction Work Done posted a third straight decline, but the drop of 0.2% was much better than the forecast of -1.2%. Meanwhile, the Wage Price Index remained unchanged for a third consecutive quarter, posting a gain of 0.6% in Q4. This indicator is closely monitored as wage prices are an important indicator of consumer inflation.
AUD/USD 0.7900 H: 0.7900 L: 0.7830
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