AUD/USD holds near 0.7200 as focus shifts to US NFP report
- AUD/USD trades in the negative territory near 0.7200 on Friday.
- US Dollar Index clings to recovery gains above 93.00.
- Eyes on the US July Nonfarm Payrolls report.
After spending the Asian session in a tight range near 0.7330, the AUD/USD pair came under modest pressure during the European trading hours and slumped to 0.7200 area. As of writing, the pair was down 0.45% on a daily basis at 0.7202.
DXY steadies above 93.00 ahead of US jobs report
The cautious market mood ahead of the all-important labour market data from the US provides a boost to the safe-haven greenback on Friday. The US Dollar Index (DXY), which registered its lowest daily close since May of 2018 at 92.52 on Thursday, was last seen gaining 0.43% on the day at 93.17.
If the Nonfarm Payrolls report prints a better reading than analysts' estimate of 1.6 million, the greenback could struggle to preserve its strength amid risk-on flows.
Previewing the data, "we are looking for a further 900K gain in the headline. We also see the unemployment rate falling to 10.5% from 11.1%, in line with the median estimate," said Deutsche Bank analysts. "This data will give some insight into how the renewed spread of the coronavirus through the US, especially in the South and West have affected the US economy."
Earlier in the day, Reserve Bank of Australia's (RBA) Assistant Governor Luci Ellis said the economic recovery in Australia was expected to be slow and uneven. "The GDP will probably take several years to return to the trend path expected prior to the virus outbreak," Ellis added and made it difficult for the AUD to stay resilient against its peers.
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.
