The Australian dollar is lower as it resumes its trend downwards sparked by the US Federal Reserve’s decision to scale back its economic stimulus program.

At 0700 AEDT on Thursday, the local unit was trading at 88.90 US cents, down from 89.36 cents on New Year’s Eve on Tuesday.

FXCM market analyst David de Ferranti said the Australian dollar found some respite after Christmas but the longer-term trend is for the currency to fall.

“Sellers may be left wanting for a catalyst to send the Aussie on its next leg lower over the week ahead,” he said.

“US dollar weakness has also helped to support the Australian dollar against the US dollar, as the initial enthusiasm surrounding the Fed’s decision to taper its bonds buying program starts to fade.

“Interestingly, despite some recent weakness in the greenback in the foreign exchange space, gold plunged back below the $US1,200 mark in trading overnight.”

The Fed announced in December that it would reduce its monthly bond-buying program by $US10 billion, to $US75 billion, starting in January.

On Thursday, the Australian Industry Group will release its December manufacturing figures.