AUD/USD climbs above 0.6540 on fresh USD weakness
- AUD/USD remains on track to post weekly gains.
- US Dollar Index drops to 99.50 on Friday.
- Falling US Treasury bond yields seem to be weighing on the greenback.
The AUD/USD pair dropped to a fresh session low of 0.6505 in the early trading hours of the American session with the initial reaction to the US jobs report. However, the broad-based selling pressure surrounding the USD helped the pair gain traction. As of writing, AUD/USD was up 0.72% on the day at 0.6541.
On a weekly basis, the pair is gaining more than 100 pips and remains on track to close sixth straight week in the positive territory.
Mixed reaction to US NFP data
The monthly data published by the US Bureau of Labor Statistics showed on Friday that Nonfarm Payrolls (NFP) declined by 20.5 million in April. Moreover, the Unemployment Rate rose sharply to 14.7% from 4.4% in the same period. Although the greenback stayed relatively resilient against its rivals after the data, it lost its strength amid slumping Treasury bond yields.
The two-year US T-bond yield dropped to a fresh record low of 0.113% on Friday and the 10-year T-bond yield was last down 1% on the day near 0.63%. As of writing, the US Dollar Index was losing 0.35% at 99.50.
Assessing the NFP report, "we expect more positive numbers as the economy "reopens" but the net result will likely still be much higher unemployment than pre-crisis for several years," said TD Securities analysts. "Also, weakness has probably not peaked yet; yesterday's claims report was for the week ending May 2, two weeks after the sample week for today's report."
Technical levels to watch for