- AUD/USD holds on to gains above 0.6400 as market sentiment improves.
- The attractiveness of risk assets improved after reports from Iran indicated that the Isfahan attack had been exaggerated.
- Weak Australian employment data positively influences speculation about an early RBA rate cut.
The AUD/USD pair maintains gains above the support of the 0.6400 round level in the early hours of the session on Friday. AUD/USD recovers as fears of a further escalation of tensions in the Middle East subside, after Iran reported that the drone attack did not damage the Isfahan nuclear facilities. Furthermore, Israel's attack, which has not been confirmed by them but has been confirmed by US officials, appeared to be limited in size. Meanwhile, Iran said it has no plans for immediate retaliation.
Market sentiment turns optimistic as the attractiveness of risk assets improves. The S&P 500 experiences buying interest at the opening and recovers the losses recorded in the European session. The yield on the 10-year US Treasury bond falls to 4.62% even though Federal Reserve (Fed) policymakers have been supporting higher interest rates for longer.
Fed policymakers have been arguing that they are comfortable with higher interest rates because demand for labor is robust and wages are rising. They have warned that the progress of inflation towards the 2% objective is less than expected.
The US Dollar Index (DXY) hovers around 106.00 as the attractiveness of risk assets improves. The near-term outlook for the US dollar remains strong due to the encouraging US economic outlook.
Meanwhile, weak Australian employment data for March has reinforced speculation about an early rate cut by the Reserve Bank of Australia (RBA). According to the Australian Bureau of Statistics, employers laid off 6,600 workers compared to expectations of new hires of 7,200. In February, 117,600 people were hired, a figure revised slightly upward from 116,500. The unemployment rate rose to 3.8% from 3.7%, but remained below estimates of 3.9%.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
