AUD/USD renews weekly bottom around 0.6890 amid poor Aussie employment, downbeat yields

AUD/USD renews weekly bottom around 0.6890 amid poor Aussie employment, downbeat yields

  • AUD/USD bears poke previous monthly top during a two-day downtrend from five-month high.
  • Australia jobs report bolstered case for slower rate hike from the RBA.
  • US Treasury bond yields renew multi-day low even as downbeat data, hawkish Fedspeak renew recession fears.

AUD/USD holds lower ground near the intraday low near 0.6890 as the previous monthly top probes the bears during the second loss-making day amid early Thursday in Europe. In doing so, the Aussie pair extends the previous day’s pullback from the highest levels since August 2022 amid a downbeat Australian employment report for August, as well as growing fears of recession.

Australia’s headline Employment Change turned negative on a seasonally adjusted basis, printing -14.6K figure versus 22.5K expected and 64K prior. Further, the Unemployment Rate also rose to 3.5% compared to the market consensus of witnessing no change in the 3.4% previous readings.

Elsewhere, softer prints of the US data and hawkish Fed talks renew economic slowdown fears and weigh on the sentiment, which in turn exert downside pressure on the risk-barometer AUD/USD pair.

That said, US Retail Sales marked the biggest slump in a year while the Producer Price Index also dropped to the lowest level in six months during December. Further, St. Louis Federal Reserve’s President James Bullard said US interest rates have to rise further to ensure that inflationary pressures recede. On the same line, President of the Federal Reserve Bank of Cleveland Loretta Mester praised the Fed’s actions to tame inflation. Further, Kansas City Fed President Esther George mentioned that the central bank must restore price stability, “that means returning to 2% inflation.” Recently, Dallas Federal Reserve President Lorie Logan supported a slower rate hike pace but also mentioned possibly a higher stopping point.

As the AUD/USD bears cheer the recession woes in the US, as well as fears of a less hawkish Reserve Bank of Australia (RBA) due to the downbeat Aussie jobs report, the pair traders ignore upbeat concerns surrounding China. Recently, Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF) said, “China could see a sharp recovery in economic growth from the second quarter onwards based on current infection trends after the dismantling of most COVID-19 restrictions.”

Amid these plays, the S&P 500 Futures and Australia’s ASX 200 print mild losses while the US 10-year Treasury yields refresh a four-month low and the two-year counterpart drops to the lowest levels since early October at the latest.

Looking forward, AUD/USD traders should pay attention to the risk catalysts, mainly the central bank speakers amid a light calendar, for clear directions as bears struggle to retake control.

Technical analysis

The AUD/USD pair’s confirmation of a two-week-old rising wedge keeps the bears hopeful of witnessing a fresh monthly low.

Also read:AUD/USD Price Analysis: Bears cheer rising wedge confirmation around 0.6900

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Read More