AUD/USD approaches last week’s low (0.7642) following the limited reaction to the US Non-Farm Payrolls (NFP) report, and swings in investor confidence may continue to sway the exchange rate as the Reserve Bank of Australia (RBA) acknowledges that “the improvement in risk sentiment has also been associated with a depreciation of the US dollar and an appreciation of the Australian dollar.”
Nevertheless, the contraction in US employment may encourage the Federal Reserve to further utilize its non-standard tools as Vice-Chair Richard Clarida insists that the Federal Open Market Committee (FOMC) “will continue to increase our holdings of Treasury securities by at least $80 billion per month and our holdings of agency mortgage-backed securities by at least $40 billion per month until substantial further progress has been made toward our maximum-employment and price-stability goals.”
