AUD/USD loses traction and plunges to two-week lows around 0.6930

• The AUD/USD pair falls sharply more than 100 points after the US economic data.
• The US Nonfarm Payrolls report nearly tripled the market’s job creation expectations.
• The US ISM Non-Manufacturing PMI is back in expansionary territory.

The AUD/USD plunged after US economic data released on Friday showed the labor market remains tight, which would keep the US Federal Reserve under pressure to cut inflation to the 2% target. This, together with the fact that the US dollar pared Thursday’s losses, are the reasons for today’s price developments. At the time of writing, the AUD/USD pair is trading around 0.6970.

US jobs data surprised investors and further Fed action expected

Wall Street opened the last trading session of the week with losses. The US Department of Labor released January data that surprised investors, with Non-Farm Payrolls data shattering expectations as the economy added 517,000 jobs to the economy, beating estimates for job creation. only 200,000 jobs. Consequently, the Unemployment Rate fell to 3.4% from 3.5%, while the December figures were revised upwards.

Average Hourly Earnings, sought by the US Federal Reserve as a measure of wage inflation, linked to last week’s Employment Cost Index (ICE), stood at 0.3% MoM, in line with forecasts, but below the December report.

The ISM Services PMI Index has increased six points in January, rising to 55.2 from 49.2 in December (revised down from 49.6). The figure improves market expectations, which expected an increase to 50.4.

Late in the day, the US economic calendar revealed that the global S&P PMIs came in slightly above estimates. For its part, the ISM non-manufacturing PMI index, which reports the behavior of the services economy, is once again in expansive territory, rising to 55.2 from an estimated 50.4 and well above December’s 49.2.

AUD/USD Key Technical Levels