AUD/USD refreshes daily low, finds some support near 0.7100 mark ahead of NFP

• AUD/USD witnessed some selling on Friday after RBA minutes indicated a patient approach.
• The cautious mood also contributed to driving flows away from the perceived riskier aussie.
• Rising US bond yields extended some support to the USD, which added to the selling bias.
• The market focus remains glued to Friday’s release of the closely-watched US NFP report.

The AUD/USD pair drifted lower through the early part of the European session and dropped to a three-day low, around the 0.7100 mark in the last hour.

Following an early uptick to the 0.7150 area, the AUD/USD pair witnessed some selling on the last day of the week and extended the overnight modest pullback from over a one-week high. The Reserve bank of Australia, in the Statement on Monetary Policy (SoMP) released this Friday, said that the board is prepared to be patient amid significant uncertainties surrounding the inflation outlook. This, along with the cautious market mood, undermined the perceived riskier aussie.

On the other hand, the US dollar dropped to a two-and-half-week low and was pressured by an extension of the post-ECB rally in the shared currency. That said, some follow-through uptick in the US Treasury bond yields helped limit any further losses for the greenback. This was seen as another factor that exerted additional downward pressure on the AUD/USD pair, though any further downfall seems limited as market participants await the release of the US monthly jobs data.

The popularly known NFP report, due later during the early North American session, is expected to show that the US economy added 150K jobs in January, down from the 199K reported in the previous month. Even a slight disappointment would be enough to weigh on the already weaker USD and lend some support to the AUD/USD pair. Nevertheless, the pair remains on track to post strong weekly gains and reverse a major part of last week's losses to the lowest level since June 2020.

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