AUD/USD drops to daily lows near 0.7160, erases majority of weekly gains
|- AUD/USD pair is down nearly 1% on Friday.
- Broad-based USD strength in American session dragged AUD/USD lower.
- Nonfarm Payrolls in the US rose more than expected in July.
The AUD/USD pair spent the first half of the day fluctuating in a relatively tight range above 0.7200 but lost its traction during the American session. As of writing, the pair was down 0.99% on a daily basis at 0.7161. On a weekly basis, the pair is still up around 20 pips.
DXY looks to end the week on a strong footing
The fresh USD-buying wave witnessed in the second half of the day forced AUD/USD to push lower. The data published by the US Bureau of Labor Statistics showed that Nonfarm Payrolls (NFP) in the US rose by 1,763,000 in July and beat the market expectation of 1,600,000. Further details of the report revealed that the Unemployment Rate dropped from 11.1% to 10.2%.
Commenting on the NFP report, “across the private sector, job growth eased up broadly, but most major industries continued to chip away at earlier job losses," said Wells Fargo analysts. "That suggests a broader hit to employment beyond the industries most immediately impacted by social distancing efforts has not manifested in a material way, at least not yet.”
Although the initial market reaction to the jobs report brought the US Dollar Index (DXY) down to 93.00, the cautious market mood provided a boost ahead of the weekend. With investors waiting for US lawmakers to come to an agreement on the next coronavirus bill and US-China tensions remaining elevated, the DXY advanced to its highest level in three days at 93.62. At the moment, the index seems to have gone into a consolidation phase near 93.50, where it's still up more than 0.7% on a daily basis.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.