The Australian dollar is holding steady today awaiting a speech later in the afternoon by US Fed president Janet Yellen while also being bolstered by a round of strong local data.

At 3.18pm (AEDT) the Aussie dollar was trading at US70.55c after hitting a low of US69.73c in yesterday’s trade.

Data out of Australia yesterday showed New home sales grew by 6 percent, well up  on the previous figure of  -2.7 percent which is good for the economy but a problem for the RBA who would like to leave a rate cut on the table if needed this year.

A rate reduction at this stage would on further inflame an already overheated housing market so bets on a move from the central bank were greatly reduced after the news.

In a real boost for the local economy, the latest Westpac consumer confidence survey also came in well above expectations last month jumping by nearly 5 percent to 101.3 and breaking the psychological barrier of 100, which separates the optimists from the pessimists.

The news may help boost the inflation figure, which currently sits at the bottom end of the RBA’s target range of between 2 and 3 percent.

All eyes will now be on the US later today as Fed president Yellen gives her economic testimony to US congress with some predicting she may take a cautious tone in light of the global turmoil surrounding financial markets.

This may be enough to lend some support to the Aussie dollar as we head into Thursdays speech by governor RBA governor Glen Stevens that is also expected to create some volatility in the local currency.