Forex Pros – The Australian dollar was down against its U.S. counterpart on Wednesday, falling to a 3-day low as higher U.S. Treasury yields boosted demand for the greenback.
AUD/USD hit 0.9767 during early European trade, the pair's lowest since December 3; the pair subsequently consolidated at 0.9801, shedding 0.27%.
The pair was likely to find support at 0.9618, the low of December 2 and resistance at 0.9937, the high of December 3.
The decision by U.S. President Barack Obama to extend tax cuts for two years triggered selling of fixed-income securities. The tax cuts could potentially reduce pressure on the Federal Reserve to extend its USD600 billion bond-purchase program, while boosting U.S. growth.
Elsewhere, official data showed that the number of Australian new home loan approvals rose significantly more-than-expected in October.
The Australian Bureau of Statistics said the number of home loans granted rose by a seasonally adjusted 1.9% in October, after rising by 1.3% in September.
Analysts had expected the number of home loans granted to rise by 0.2% in October.
Meanwhile, the Aussie was slightly higher against the euro, with EUR/AUD slipping 0.04% to hit 1.3486.
On Wednesday, the Reserve Bank of Australia left its benchmark interest rate unchanged at 4.5%, in line with expectations. The bank said it expected inflation in the next few quarters to be "little changed."
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