AUD/USD refreshes daily top amid post-NFP USD sell-off, lacks follow-through
- AUD/USD builds on its intraday recovery from a four-month low amid the heavy USD selling bias.
- The mixed US jobs data dampens hopes for a 50 bps Fed rate hike in March and weigh on the buck.
- The RBA’s dovish shifts warrant some caution before placing fresh bullish bets around the major.
The AUD/USD pair stages a modest recovery from a fresh four-month low set earlier this Friday and the momentum picks up pace during the early North American session. The latest leg of a sudden spike in the last hour follows the release of the mixed US jobs data and lifts spot prices to a fresh daily peak, around the 0.6630 region.
The US Dollar weakens across the board after the headline NFP showed that the US economy added 311K new jobs in February, well below the previous month's downwardly revised reading of 504K. Adding to this, the jobless rate unexpectedly rose to 3.6% from the 3.4% previous and wages also fell short of market estimates, rising by 0.2% for the month and a 4.6% YoY rate.
The slight disappointment was enough to force investors to scale back expectations for a more aggressive policy tightening by the Federal Reserve (Fed). In fact, the markets are now pricing in a greater chance of a 25 bps lift-off at the upcoming FOMC meeting on March 21-22, which continues to drag the US Treasury bond yields lower and is seen weighing on the Greenback.
Apart from this, a modest recovery in the US equity futures further undermines the safe-haven buck and benefits the risk-sensitive Australian Dollar. That said, the lack of strong follow-through buying, along with the Reserve Bank of Australia's dovish shift earlier this week, some warrants caution for bulls and before placing aggressive bullish bets around the AUD/USD pair.
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