- AUD / USD is holding on to modest daily gains on Thursday.
- The US dollar index fell below 92.50 during the American session.
- The yield on 10-year US Treasuries is down more than 3%.
The pair AUD/USD struggled to make a decisive move in either direction on Thursday. After dipping below 0.7350 early in the European session, the pair bounced back towards 0.7300 but struggled to preserve its bullish momentum. At time of writing, AUD / USD was up 0.1% on the day at 0.7371.
DXY seeks to break a three-day winning streak
Renewed USD weakness amid falling US Treasury yields appears to be helping AUD / USD stay in positive territory.
The US Dollar Index (DXY), which posted gains in the first three trading days of the week, is currently down 0.27% on the day at 92.45. Earlier in the day, data released by the U.S. Department of Labor showed that initial jobless claims fell to the lowest level since the start of the pandemic of 310,000 in the week ending Sept. 4. However, this data was largely ignored by market participants.
Meanwhile, weak demand in the 30-year US Treasury auction led to a sharp drop in Treasury yields. Currently, the benchmark 10-year US Treasury yield is shedding 3.8% to 1.29%, putting additional weight on the dollar.
However, despite the poor performance of the DXY, the risk averse market environment is making it difficult for the AUD to find demand.
No high-level macroeconomic data will be released on Friday’s economic docket and the USD market valuation is likely to continue to drive movements in AUD / USD.