- AUD / USD built on its steady intraday rise and updated daily highs after the US jobs report.
- The NFP figures disappointed expectations, although they were offset by a drop in the unemployment rate.
- A quiet reaction in the US bond market helped limit USD losses and limited the pair.
The pair AUD/USD added to its modest intraday gains and updated daily highs in reaction to mixed US employment data The pair was last seen trading nearly 0.50% gains on the day, and the bulls are now looking to take advantage of the momentum above 0.7700.
Following the fall of the previous day, the pair managed to attract some buying on the dips on the last trading day of the week and has now bounced almost 60 pips from the daily lows to the 0.7645 zone. The intraday rally accelerated during the early days of the US session following the release of the US monthly employment details.
The NFP headline showed that the US economy added 559,000 new jobs in May, disappointing consensus estimates that point to a reading of 650,000. The negative figure, to some extent, was offset by a slight upward revision of the previous month’s reading to 278,000 from 266,000 previously reported. Added to this, the unemployment rate dropped to 5.8% from 6.1% in April.
The mixed report did little to bolster expectations that stronger economic data could force the Fed to begin reducing its bond buying program. This was evident by the emergence of some new selling around the US dollar, which, in turn, was seen as a key factor that helped the AUD / USD pair to take advantage of its positive intraday movement.
That being said, a fairly subdued reaction in the US bond market prevented investors from making aggressive bets in the USD and kept any runaway rally in the AUD / USD limited. So it remains to be seen if the bulls can capitalize on the move or if the rally is seen as a selling opportunity at higher levels.