AUD/USD extends its downside below 0.6330 amid the risk-off mood

The AUD/USD pair extends its downside below the mid-0.6300s during the early Asian session on Friday. The pair retreats from 0.6340 as markets turn cautious. AUD/USD currently trades around 0.6327, losing 0.02% on the day.

Fed Chair Jerome Powell signaled a desire to pause rate hikes and watch how economic data develops in the coming months. Powell further stated that more monetary policy tightening might be appropriate if there are more indications about above-trend growth or if the labor market stops easing. His comments dragged the USD lower broadly and acts as a tailwind for the AUD/USD pair.

The US job data showed the economy in the US remains solid. The weekly Initial Jobless Claims declined to 198K for the week ending October 14, the lowest level since January. Existing home sales fell 2.0% MoM in September and 19% YoY, the lowest level since 2010. These numbers indicate that higher mortgage costs negatively impact housing market confidence.

On Thursday, the Australian Unemployment Rate came in at 3.6% in September, compared with the expectations of 3.7% and the previous figure of 3.7%. The Employment Change arrived at 6.7K in September, compared with the consensus forecast of 20K and 64.9K jobs addition seen in August.

Apart from this, the escalating geopolitical tensions in the Middle East exert pressure on riskier assets like the Australian Dollar (AUD). Traders will keep an eye on the US President Biden speaks, which could impact to the risk sentiment later in the day.

No top-tier economic data are due from the US docket on Friday. Traders will take more cues from the Fed officials, including Logan, Mester, and Harker.