Forex: AUD/USD: US and Australian housing sectors firming

on Jan 2, 2014
Updated: Oct 21, 2019
Listen Thursday, January 2nd:_ The US National Association of Realtors reported Monday this week that the Pending Home Sales Index m/m rose in November 2013, by 0.2 percent to 101.7, after declines for several months and suggesting that the recovery of the housing sector in the country is again gaining strength after stalling in the middle of last year. The November number was the first gain since May, when the index reached a six-year high, but fell short of expectations for one percent growth.

According to the NAR’s report, activity increased following a fall in October caused by higher mortgage rates and weaker demand. Pending sales of existing homes function as an indicator of future activity across the wider housing market. The measure is also a touchstone for economic development, with the November data reinforcing hopes that overall economic development in the US will be accelerated in the coming year.

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In Australia, Tuesday saw the release of data on lending to the private sector (Private Sector Credit), showing an increase of 3.8 percent y/y in November, bettering October’s rise of 3.5 percent, which had been the fastest rate of increase last year.

Month-on-month, Private Sector Credit grew by 0.3 percent, almost in line with the expected 0.4 percent rise. Both figures auger well for both business investment and private consumption in the coming year.

The Reserve Bank of Australia also reported that housing loans rose by 5.1 percent y/y in November, the strongest rate of growth since May 2012 and providing further encouragement that Australia is weaning itself off dependency on resource-extractive industries hit by the withdrawal of investment in the mining industry. Earlier today the RBA released December’s Commodity Prices y/y, showing a four percent decline.

Back in the US, the CB Consumer Confidence Index jumped to 78.1 points in December from 72.0 points in November and making for the highest level since September. The current situation sub-index rose to 76.2 from 73.5, while expectations rose to 79.4 from 71.1.
Unemployment Insurance Initial Claims for the past week are due out at 13.30 UTC today, with a consensus for 334,000, down on the prior week’s 338,000.
The ISM US December Manufacturing PMI follows at 15.00 UTC and is expected to fall to 56.8 from the prior 57.3.
Currently the AUD/USD is trading at 0.8913.
Today’s resistances: 0.8910, 0.8935 and 0.8955.
Today’s supports: 0.8860, 0.8840 and 0.8815.


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