AUD/USD erases large portion of employment-inspired gains, trades around 0.7170
- AUD/USD surged higher toward 0.7200 during Asian session on Thursday.
- Fulltime Employment in Australia rose more than expected in July.
- Cautious market mood keeps risk-sensitive AUD's gains limited.
The AUD/USD pair jumped to a daily high of 0.7188 in the early trading hours of the Asian session boosted by the upbeat labour market data from Australia. However, the risk-averse market environment made it difficult for the pair to preserve its bullish momentum. As of writing, the pair was still up 0.1% on a daily basis at 0.7169.
AUD rally remains short-lived
The monthly data published by the Australian Bureau of Statistics revealed that the Unemployment Rate edged higher to 7.5% in July but came in better than the market expectation of 7.8%. More importantly, Fulltime Employment surged by 43.5K during that period following June's decline of -38.1K.
Meanwhile, the cautious market mood, as reflected by slumping European equity indexes, is keeping the risk-sensitive AUD's gains limited. Furthermore, the 10-year US Treasury bond yield, which rose for four straight days, is staying on the back foot on Wednesday, not allowing the greenback to capitalize on risk-off flows.
During the American session on Thursday, the US Department of Labor will release its weekly Initial Jobless Claims data. A reading below 1 million could trigger a fresh risk rally in the second half of the day and help AUD/USD start pushing higher.
In the Asian session on Friday, the Reserve Bank of Australia Governor Philip Lowe is scheduled to deliver a speech.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
