AUD/USD eases towards 0.6900 heading into the US NFP release

Finance

AUD/USD eases towards 0.6900 heading into the US NFP release

The Australian Dollars (AUD) recovery attempt against the US Dollar (USD) has been capped a few pips ahead of the 0.6920 level. The pair has been trimming gains on Friday, returning to the 0.6900 area at the time of writing, with all eyes on the release of the US Nonfarm Payrolls report.

A moderate risk aversion is keeping safe haven assets like the US Dollar buoyed on Friday as the Iran war continues without a clear end in sight and the Strait of Hormuz remains closed, adding pressure on exporting economies such as Australias.

Barains proposal to reopen Hormuz finds opposition

The UN Security Council is expected to vote on a Bahraini proposal to force Iran to reopen the critical waterway, which has been watered down amid opposition from veto-wielding countries, China and Russia, while Iran warned that “provocative action” in the area will only complicate the situation.

On Thursday, data from Australias Bureau of Statistics revealed that the trade surplus widened to 5,686 million in February from the downwardly revised 2,258 million surplus in the previous month, beating market expectations of a 2,500 million gain. These figures endorse the hawkishly-leaning minutes from the last Reserve Bank of Australia (RBA) meeting, and provided some support to the Aussie.

The focus today shifts to the US Nonfarm Payrolls report. Market expectations anticipate a 60K increase in net employment, following a 92K loss in February, with the jobless rate unchanged at 4.4%. Trading volumes are at unusually low levels due to the Good Friday holiday, and that might cause wild fluctuations in the case of a relevant NFP shock, if price action hits liquidity pockets.