The Australian dollar climbs against a weakening US dollar amid concerns over US debt management and fiscal credibility.
The AUD/USD pair advanced to near 0.7135 in Asian trading on Friday, extending gains as the US dollar faced downward pressure. Markets reacted to US Treasury Secretary Scott Bessent’s announcement that bond buybacks could exceed $4 billion, seen as a short-term fix for rising yields rather than a structural solution.
Earlier, the US Treasury doubled buybacks for longer-dated securities to curb yield spikes, but skepticism over the strategy weighed on the dollar. Meanwhile, Australian employment data disappointed, with a 15,800-job decline in July and unemployment rising to 4.5%, below expectations of a 15,000 gain.
The dollar’s decline reflects broader concerns about US fiscal health and institutional credibility, while softer Australian labor data may limit further AUD upside.