- AUD / USD remains on track to post weekly gains.
- The US dollar index fell to 99.50 on Friday.
- Falling yields on US Treasuries seem to weigh on the greenback.
AUD / USD fell to a new low of 0.6505 in the first trading hours of the US session with the initial reaction to the US employment report. However, the general selling pressure surrounding the USD helped the pair gain ground. At the time of writing, the AUD / USD was up 0.72% on the day to 0.6541.
On a weekly basis, the pair earns more than 100 pips and remains on track to close the sixth consecutive week in positive territory.
Mixed reaction to US NFP data
Monthly data released by the US Bureau of Labor Statistics showed on Friday that non-farm wages (NFP) fell by 20.5 million in April. In addition, the unemployment rate rose sharply to 14.7% compared to 4.4% during the same period. Although the greenback remained relatively resilient to its rivals after the data, it lost its strength against a backdrop of declining Treasury bill yields.
On Friday, the yield on two-year US bonds fell to a new record of 0.113% and the yield on 10-year bonds fell by 1% on the day close to 0.63%. At the time of writing, the US dollar index was down 0.35% to 99.50.
According to the NFP report, “we expect more positive figures as the economy” reopens “, but the bottom line will likely remain much higher unemployment than before the crisis for several years,” said TD Securities analysts. “In addition, the weakness has probably not yet peaked; yesterday’s complaints report was for the week ending May 2, two weeks after the sampling week for today’s report.”