- Falling copper prices weigh on commodity-sensitive AUD on Friday.
- US Dollar Index climbs to fresh multi-month highs above 98.60.
- Nonfarm Payrolls (NFP) in the US is expected to rise to 160K in January.
The AUD/USD pair extended its slide after breaking below the 0.6700 handle and touched its lowest level since March of 2009 at 0.6672 before recovering modestly. As of writing, the pair was trading at 0.6685, erasing 0.68% on a daily basis.
Falling copper prices amid concerns over the negative impact of the coronavirus outbreak on China’s metal demand hurt the commodity-sensitive AUD. “Three-month copper on the London Metal Exchange (LME) fell 0.4% to $5,713.50 a tonne,” Reuters reported. “The most-traded copper contract on the Shanghai Futures Exchange closed down 0.6% at 45,670 yuan ($6,545.89) a tonne.”
Furthermore, the data published by the Australian Bureau of Statistics revealed that Retail Sales in December declined by 0.5% on a monthly basis in December to further weigh on the AUD.
DXY extends rally on Friday
On the other hand, the sour market sentiment helps the relatively safer USD continue to find demand on Friday with the US Dollar Index (DXY) rising to its best level since October at 98.62. At the moment, the index is up 0.12% on the day at 98.59.
In the early trading hours of the American session, the US Bureau of Labor Statistics will release its closely-watched Nonfarm Payrolls (NFP) report. Analysts see the NFP rising to 160K in January from 145K in December.
Previewing the data, “the tight labor market should continue to translate into modest wage growth,” said Wells Fargo analysts. “We expect average hourly earnings rose 0.3% in January, which would suggest a modest lift in the year-ago rate to 3.0%.”
US NFP Preview: 6 Major Banks expectations for January payrolls report.
Technical levels to watch for