AUD/USD slumps below 0.7400 on broad US dollar strength

• AUD/USD dipped below 0.7400 for the first time in ten days, printed a low of 0.7382.
• In the FX Market, the sentiment is risk-averse, as safe-haven currencies appreciate.
• US Jobless Claims improve for the fourth consecutive week.

The AUD/USD pair plunges during the day, down 0.62%, trading at 0.7402 at the time of writing. The market mood is upbeat, as portrayed by global equities trading higher, headed by US stocks indices reaching all-time highs, whereas, in the FX market, safe-haven peers appreciate against risk-sensitive currencies like the AUD, the NZD, and the GBP.

The Australian dollar has been seesawing in the last couple of days

On Wednesday, the AUD/USD pair dipped as low as 0.7420 on positive US macroeconomic figures for October. ADP employment jobs report, prelude of Nonfarm Payrolls, and US PMI Services number were better than expected, lifting the greenback against most G10 currencies. Later on the day, the Federal Reserve announced the telegraphed bond taper, which investors perceived as dovish, which witnessed a spike of 50 pips on the pair, settling around 0.7450. 

On Thursday, during the Asian session, market participants changed their course as the Fed left the door open for a faster bond tapering process. The US central bank said that “comparable decreases in buying pace are likely reasonable each month, but we are willing to adapt if necessary.”  AUD/USD traders reacted, sending the pair sliding towards 0.7382.

Meanwhile, the US Dollar Index, which tracks the buck’s performance against its peers, advances half percent, sits at 94.32, a tailwind for the AUD/USD pair. US T-bond yields drop in the bond market, with the 10-year falling five basis points, down to 1.524% at press time.

US Jobless Claims improve for the fourth consecutive week

On the macroeconomic docket, the Australian Retails Sales for the Q3 dropped by 4.4%, better than the 4.6% foreseen by analysts, blamed for lockdowns. Further, the Trade Balance for September showed a surplus of A$12.243 B lower than the A$15 B in August.

On the US front, the Bureau of Labor Statistics (BLS) reported the Initial Jobless Claims for the week ending on October 29, which rose to 269K, better than the 277K estimated by economists, adding to the improvement of the labor market, as it is the fourth consecutive week of drops.