AUD/USD retreats on US jobless claims, hovers around 0.6730s

• AUD/USD fell from 0.6760s as US Treasury bond yields exploded.
• US jobless claims continued their downtrend, printing figures below estimates.
• What to watch? Australia’s PMIs, US Services PMIs, and Fed speakers.

AUD/USD found resistance at around 0.6760, dropping almost 0.40% on Thursday after solid economic data from the United States (US) was released. A tight labor market, and last week’s higher inflation figures in the US, suggest that the US Federal Reserve (Fed) still has ways to go to curb inflation. The AUD/USD exchanges hands at around 0.6730s.

AUD/USD to finish Thursday’s session with losses

Wall Street Is set to close with solid gains in Thursday’s session. Nevertheless, in the FX space, risk-perceived currencies, like the Australian Dollar (AUD), took their toll on higher US Treasury bond yields, with 2s, 5s, and 10s, staying above the 4.08% threshold. Consequently, the US Dollar rose, as shown by the US Dollar Index (DXY), up 0.57%, at 104.965.

The US docket revealed that Initial Jobless Claims for the week ending February 25 came at 190,000 below the 195,000 estimated by analysts. Following the release,  US Treasury bond yields skyrocketed above the 4% mark, with 2s reaching as high as 4.90%, while the DXY hit a daily high of 105.180.

The AUD/USD edged lower and hit a daily low of 0.6706; sellers failed to extend its fall below the R1 daily pivot point at around 0.6707. nevertheless, the AUD/USD recovered some ground, on Atlanta’s Fed President Raphael Bostic saying that the Fed could be in a position to pause by mid-late summer.

Bostic added that he foresees the Federal Funds Rate (FFR) to peak at around 5.00% - 5.25% and reiterated that it will stay there “well into 2024.”

What to Watch?

The docket will feature the S&P Global Services PMI on the Australian front, while China’s data with the Caixin Services PMI will also influence the Aussie Dollar (AUD). On the US front, Fed speakers would cross newswires alongside the release of the ISM and S&P Global Services PMIs.

AUD/USD Technical levels