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AUD/USD edges toward 0.7135 as US Dollar fades on buyback doubts
The US Treasury said it could expand bond buybacks beyond $4 billion, while Australia’s July employment unexpectedly fell, lifting the unemployment rate to 4.5%.
The Australian dollar firmed against the US dollar, with AUD/USD gaining traction near 0.7135 during Friday’s Asian session, according to FXStreet.
FXStreet said traders scaled back confidence in the US policy backdrop after the US Treasury’s bond buyback plans, viewing them as a temporary fix amid renewed concerns over the US fiscal picture and the credibility of institutions. US Treasury Secretary Scott Bessent said the Treasury could increase buybacks beyond $4 billion and noted the decision is intended to reflect yields that do not align with economic fundamentals.
FXStreet also pointed to upcoming macro data, with preliminary US Purchasing Managers Index readings due later on Friday, as an additional near-term catalyst for the pair.
On the Australia side, weaker labor data limited further upside, as the Australian Bureau of Statistics reported employment fell by 15,800 jobs in July and the unemployment rate rose to 4.5%. FXStreet noted commentary from analysts that a cooling labor market strengthens the case for the Reserve Bank of Australia to keep rates on hold.