AUD / USD pulls back below 0.7600 as market mood turns sour

• AUD / USD is having a hard time holding above 0.7600.
• The US Dollar Index is holding on to modest daily gains above 92.60.
• S&P 500 futures turned negative for the day.

After climbing above 0.7600 during European trading hours, the pair AUD/USD lost its traction as the observed negative shift in market sentiment provided a boost to the dollar. At time of writing, the pair is trading at 0.7590, still up 0.1% on the day.

Safe haven flows return

The Labor Department reported that initial claims for unemployment benefits fell by 97,000 to 684,000 in the week ended March 20. The data was better than the market consensus which was for a reading of 730,000. For the first time in a year they were less than 700,000.

Regarding continued orders, there was a drop from 264,000 to 3,870,000, in the week ended March 13. The data was also better than expected of 4,043,000 million. It is the lowest level since the effects of the pandemic began to be felt deeply.

At the beginning of the session, FOMC Chairman Jerome Powell reiterated that they are strongly committed to inflation averaging 2% over time. “As the economy recovers and makes substantial progress toward our goals, we will reverse bond purchases,” Powell told National Public Radio (NPR).

Later, New York Federal Reserve Chairman John Williams and Federal Reserve Vice Chairman Richard Clarida will deliver speeches. Meanwhile, investors will closely monitor the performance of the major Wall Street indices and a sharp drop after the opening bell could help the USD continue to outperform its rivals.

No major macroeconomic data will be published on the Australian economic docket on Friday.

Technical levels