AUD/USD higher and headed for a second consecutive weekly gain

On Friday the Australian dollar traded on higher levels against the greenback, heading for its second week of gains, following the mixed US data from yesterday amid uncertainty over the future of FEDs easing program.

AUD/USD hit a session high at 0.9294 at 8:10 GMT, after which consolidation followed at 0.9290. Support for the pair was expected at July 15th low, 0.9036, while resistance was to be met at July 24th high, 0.9318.

Investors remained cautious, following the mixed data from the United States, released on Thursday. The Labor Department in the country stated that initial jobless claims rose by 7 000 to reach 343 000 during the week ended on July 20th 2013. Results during the preceding week were revised up to 336 000 from 334 000 previously. Initial estimates pointed that the number of claims will reach 340 000.

On the other hand, the Department of Commerce reported that durable goods orders in the United States rose by 4.2% in June in comparison with preliminary estimates of a 1.3% rise, while in May the value of the indicator was revised up to an increase by 5.2% from a 3.6% rise previously. Core durable goods orders, which did not contain volatile components such as transportation, remained unchanged in June, compared to expectations that the indicator will show a 0.5% increase.

Additionally, the Federal Open Market Committee is scheduled to hold a meeting on July 30-31st. Bloomberg reported that it won’t announce a decision to pare its monthly bond purchases at that meeting, according to a survey of 54 economists. 50% of the surveyed said Fed Chairman Ben Bernanke will decide to cut asset purchases to 65 billion USD in September this year from the current scale of 85 billion USD.

“A lot will depend on how financial conditions evolve in the U.S. and whether the Fed looks to reduce its stimulus,” said Peter Dragicevich, a Sydney-based currency economist at Commonwealth Bank of Australia (CBA), cited by Bloomberg. “We expect it will at some point in 2013, but there is a risk that it delays it by a meeting or two. We don’t think the Aussie will fall too far.”

In the mean time, experts saw a 76% chance that Reserve Bank of Australia Governor Glenn Stevens and his board will reduce Australia’s base interest rate by 25 basis points to 2.50% at banks meeting next month, as probability of such decision was 65% as of July 19th.

Elsewhere, the Aussie was trading on higher levels against the New Zealand dollar, with AUD/NZD pair adding 0.33% for the session to 1.1485 at 8:40 GMT. Australian currency gained positions against the euro as well, with EUR/AUD cross down by 0.38% to trade at 1.4309 at 8:41 GMT.