- AUD / USD saw some selling on Thursday in reaction to weaker Australian employment data.
- The COVID-19 troubles and cautious mood further undermined the most risky Australian perceived.
- A subdued action in the USD price helped limit losses ahead of major US macro releases.
The pair AUD/USD is extending its steady intraday decline during Thursday’s European session and remains on the defensive, around the region of 0.7315, near their daily lows.
The pair has failed to capitalize on the previous day’s modest rally from the 0.7300 level, at two-week lows, and has found new sales near the region of 0.7345 Thursday. The Australian dollar has been weighed down by local data, which showed that the number of employees fell more than expected in August.
The Delta variant of the coronavirus had forced the two largest cities in Australia to close and it had led companies to cut staff. This, coupled with a drop in the participation rate to 65.2% from 66%, eclipsed a unexpected drop in unemployment rate to 4.5% during the reported month from 4.6% reported in the previous month.
This occurs after disappointing Chinese macro data on Wednesday and it has further fueled concerns about a global economic slowdown. This, in turn, has been seen as a key factor that has acted as a headwind for the higher perceived risk Australian dollar. That being said, a subdued US dollar price action has helped limit any deeper losses for the AUD / USD pair.
The softer US CPI report released earlier this week raised uncertainty about the likely timing of the Fed’s downsizing plan and kept USD bulls on the defensive. Investors, however, they still believe the Fed would begin reversing its huge pandemic-era stimulus later this year, which, so far, has been lending some support to the US dollar.
Market participants are now awaiting the US economic calendar, highlighting the release of monthly retail sales figures, the Philadelphia Fed Manufacturing Index and initial weekly jobless claims. The data, along with broader market risk sentiment, will influence the USD and could generate some trading opportunities around the AUD / USD pair.
AUD / USD technical levels
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