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DailyBubble News

AUD/USD surges above 0.6600 on soft US jobless claims

The Australian Dollar saw a significant increase against the US Dollar on Thursday, gaining over 0.60% as the Greenback weakened following a disappointing US jobs report. The AUD/USD pair traded above the 0.6600 mark as the Asian session began on Friday.

The poor performance of the US Dollar was mainly attributed to US economic data. The US Bureau of Labor Statistics reported that initial jobless claims for the week ending May 4 exceeded expectations, rising to 231K compared to estimates of 210K. This led to a drop in US Treasury bond yields, with the 10-year benchmark note rate declining by almost four basis points.

The US Dollar Index (DXY), which measures the dollar against a basket of currencies, also fell by 0.25% to 105.23. The latest US jobs data suggests a cooling labor market, raising concerns among analysts about a potential slowdown in momentum.

Meanwhile, the Reserve Bank of Australia (RBA) decided to keep rates unchanged, causing a slight dip in the AUD/USD pair initially. However, comments from RBA Governor Michele Bullock hinted at the possibility of future adjustments to the Cash Rate.

In terms of technical analysis, the AUD/USD pair is currently neutral to upward biased, with key resistance levels being tested. If buyers manage to surpass the 0.6600 mark, the next target would be the December 28 high at 0.6871. Conversely, a drop below the 100-day moving average at 0.6577 could lead to further losses, with potential support levels at 0.6535 and 0.6515.

Overall, the Australian Dollar’s performance is influenced by various factors such as interest rates set by the RBA, the price of Iron Ore (Australia’s major export), the health of the Chinese economy, inflation, growth rate, and Trade Balance. Market sentiment also plays a significant role in determining the value of the AUD.

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