AUD/USD hangs near daily low, just above mid-0.7000s ahead of key US jobs data

• AUD/USD remains under some selling pressure for the second successive day on Friday.
• The risk-off impulse weighs on the Aussie, though fresh USD selling helps limit losses.
• Investors now look forward to the key US monthly jobs data (NFP) for a fresh impetus.

The AUD/USD pair is seen extending the previous day's retracement slide from the 0.7155-0.7160 area, or its highest level since June 2022 and losing ground for the second successive day on Friday. The pair remains depressed heading into the North American session and is currently placed near the lower end o its daily range, around mid-0.7000s.

A generally weaker tone around the equity markets turns out to be a key factor weighing on the risk-sensitive Aussie, though the emergence of fresh US Dollar selling limits losses for the AUD/USD pair. Investors remain sceptical about a speedy Chinese economic recovery in the wake of rising COVID-19 cases and lingering supply chain issues. This, along with disappointing quarterly earnings reports from major tech sector players, disrupts the recent positive sentiment around perceived riskier assets.

The USD, on the other hand, fails to capitalize on the overnight bounce from a nine-month low amid a downtick in the US Treasury bond yields. That said, hopes for a positive surprise from the US Nonfarm Payrolls (NFP) might continue to act as a tailwind for the safe-haven Greenback. An unexpected fall in the US Initial Jobless Claims on Thursday pointed to the underlying strength in the labor market and forced investors to scale back their bets for an imminent pause of the Fed's rate-hiking cycle.

Hence, the market focus will remain glued to the release of the closely-watched US monthly jobs data. Market participants seem concerned that robust employment could keep the US inflation higher and allow the Fed to stick to its hawkish stance for longer. This, in turn, could push the US bond yields higher, along with the USD, and set the way for some meaningful corrective decline for the AUD/USD pair. Nevertheless, spot prices, for now, seem to register the first weekly loss in seven.

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