AUD/USD drops for three straight days as Wall Street gains on risk aversion

Initial Jobless Claims for April 1 increased to 228,000, above projections of 200,000, signaling a softening of the US labour market. Since Wall Street is expected to complete the week with gains, with the exception of the Dow Jones, which fell by 0.02%, the AUD/USD extends its losses to three straight days. Risk aversion dominated the session in the FX market, weakening high beta currencies like the Australian Dollar, which fell 0.74% against the US dollar. The AUD/USD exchange rate is currently 0.6671.

As US stocks bulls helped the S&P 500 and the Nasdaq rise on Thursday, the North American day was marked by shifting sentiment. Initial Jobless Claims for April 1 increased to 228,000, exceeding predictions of 200,000, but lagged the prior week, which was upwardly revised to 246K, on the US economic calendar.

The US PMI employment index has indicated a slowdown in hiring since the start of the week. The US JOLTs Opening report, which demonstrated a downward movement in vacancies, reinforced this. As a result, there were more and more rumours that the Federal Reserve (Fed) might suspend its tightening cycle.

According to the ADP Employment Change report for March, businesses recruited fewer people than anticipated on Wednesday. The most recent US labour market figures have raised concerns that a future US recession is imminent given the current environment.

As a result, the AUD/USD opened Thursday’s session at or near the day’s high of 0.6730. However, it returned to its downward trend as traders booked profits in response to the publication of the US Nonfarm Payrolls report and the Good Friday holiday.

President of the St. Louis Federal Reserve James Bullard stated that the Q1 data is stronger than anticipated and that current financial conditions are not as tight as they were during the 2007–2009 financial crisis. Bullard stated that the Fed “has to remain at it” in order to bring inflation back to its 2% objective since it would be “sticky moving forward.”

Trading attention will be on the release of the US Nonfarm Payrolls because to the absence of the Australian economic docket. On April 7 at 12:30 GMT, the US Bureau of Labour Statistics will make the report public. After a 311K gain in February, most banks predict that the US economy will create 240,000 new jobs this year. According to projections, the unemployment rate will remain at 3.6%, while average hourly earnings will fall to 4.3% YoY from 4.6% in February.