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Mar 05, 2021 | Currency Market Analysis

Global Themes

AUDUSD down as Powell offers cold comfort

• Yields rise further despite Powell speech
• Aussie nears one-month lows
• US jobs in focus

Powell doesn't help

US bond yields jumped – and US shares fell – as US Federal Reserve chairman Jerome Powell offered little to comfort markets after a week of volatility.

In a highly anticipated speech, Powell held the line saying rates would stay low until “substantial policy progress [on inflation and employment] has been made.”

Importantly, Powell didn't announce any action on recently rising bond yields instead only saying the move “was something that was notable and caught my attention.”

US shares came close to erasing the gains seen so far this year with the benchmark S&P500 down 1.3% overnight.

USD higher

The AUDUSD fell 0.6% as it neared one-month lows.

The move was mostly driven by a rising US dollar with the Aussie higher in other markets.

The AUDEUR gained 0.1% while ethe AUDJPY was up 0.2%.

US jobs on watch

The US dollar remains in focus with the all-important US non-farm employment report due at 12.30am AEDT.

Wednesday night's ADP jobs, often seen as a precursor to the jobs report, disappointed, with only 117k new jobs versus the 201k expected.

Tonight’s report is expected to produce 197k news jobs with the unemployment rate is forecast at 6.3%.

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