AUD/USD has faced selling pressure near 0.6570

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The AUD/USD pair retreats from 0.6570 as the US Dollar Index (DXY) has recovered swiftly in the early New York session. The Aussie asset has

The AUD/USD pair retreats from 0.6570 as the US Dollar Index (DXY) has recovered swiftly in the early New York session. The Aussie asset has faced pressure as the market mood has turned cautious amid uncertainty over Federal Reserve (Fed) rate cut bets. The S&P500 futures have surrendered majority of gains generated in the European session, indicating that investors’ risk-appetite has declined again. The USD Index has recovered strongly to near monthly high of 103.60 as the odds of an interest rate cut decision by the Fed in March are fading away. 10-year US Treasury yields have climbed to near 4.12%.

Fed policymakers have been reiterating the need of keeping interest rates escalated for a longer period due to robust consumer spending and strengthening labor market conditions. The US Department of Labor has reported that weekly jobless claims were significantly lower. Individuals claiming jobless benefits for the week ending January 12 were lower at 187K versus. expectations of 203K and the prior reading of 207K. Meanwhile, investors await commentary from Atlanta Fed Bank President Raphael Bostic. Fed Bostic is expected to maintain a hawkish guidance on interest rates. He is expected to endorse higher interest rates till the Fed get confident that inflation will return to 2% in a sustainable manner. The Australian Dollar remains under pressure amid weak labor market data for December. The Australian employers laid-off 65.1K against 72.6K additions in November. The Unemployment Rate remained in-line with estimates and prior release of 3.9%. This has provided some relief to Reserve Bank of Australia (RBA) policymakers, which are consistently focusing on brining down inflation to 2%.

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