AUD/USD endures losses on strong US labour market, surging T-yields

The Australian dollar (AUD) experienced a dip in its Friday trading session, trading lower at approximately 0.6580. The downward movement is attributed to robust American labor market data and escalating US yields, which drove demand to the US dollar. The US Bureau of Labor Statistics data showed an increase in November Average Hourly Earnings by 0.4% MoM, higher than expected. US Nonfarm Payrolls jumped to 199K in November, surpassing the forecast of 180K, and the unemployment rate declined to 3.7% from 3.9%.

US Treasury yields are on the rise, with the 2-year rate at 4.70%, the 5-year rate at 4.24%, and the 10-year rate at 4.25%, favoring the strengthening of the USD. The strong employment figures have spurred speculations surrounding the Federal Reserve’s monetary policy regarding how long the bank will maintain rates at restrictive levels.

The AUD/USD daily chart shows mixed signals, with the Relative Strength Index indicating lowered buying momentum and the Moving Average Convergence Divergence indicating growing bearish momentum. Despite short-term selling pressures, the overall trend remains bullish, indicating the latter’s stronghold in the wider context of the tug-of-war between bears and bulls.