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Key Takeaways:
USD Weakness: The dollar fell against European majors and the Yen as US yields retreated.
Jobless Claims: Initial claims normalized to 236K, confirming last week's drop was a holiday outlier.
AUD Volatility: Soft internal jobs data undermined RBA hawkishness, though the pair bounced off key technical support.
Commodities: Silver and Gold posted massive gains, while Crude Oil successfully tested critical support from November.
USD Closes Mixed as Claims Data Weighs on Yields
The US Dollar finished the session on the back foot, giving back recent gains against most major counterparts. The greenback struggled to find demand as US Treasury yields softened across the curve, driven by a "normalization" in labor market data.
The Closing Scoreboard: The Dollar fell against the defensive and European currencies:
CHF: -0.69%
EUR: -0.43%
JPY: -0.32%
CAD: -0.16%
GBP: -0.05%
However, the greenback managed to hold onto gains against the antipodal currencies:
AUD: +0.16%
NZD: +0.10%
US Jobless Claims: The "Holiday Noise" Fades
The primary catalyst for the dollar's intraday weakness was the release of the weekly US Initial Jobless Claims.
Last week, the market was momentarily confused when claims dropped sharply to 191K, well below the 200K psychological level and the 220K estimate. However, analysts warned that the data was heavily distorted by the Thanksgiving holiday seasonality.
That caution proved correct today. Claims rebounded to 236K, coming in above the 220K estimate and testing the upper end of the recent 205K–240K range. The "weaker" jobs picture (higher claims) was welcomed by bond bulls, helping to push yields lower and, by extension, weighing on the USD.
AUDUSD: Soft Jobs Data Undercuts RBA Hawks
The Australian Dollar saw two-way volatility following a domestic jobs report that was weaker than the headline suggested. While the unemployment rate came in at 4.3% (beating the 4.4% expectation), the internal details painted a picture of a softening labor market:
Full-time jobs: Plunged by –56.5K (erasing the prior month's +55.3K gain).
Participation Rate: Dropped to 66.7% (from 67.0%), which artificially suppressed the unemployment rate.
The RBA Impact: This report comes just 24 hours after Reserve Bank of Australia Governor Bullock sounded notably hawkish, leading markets to price in a 33% chance of a March rate hike. Today’s data dampens that speculation. The sharp drop in full-time employment suggests the "cooling" the RBA has been waiting for is arriving, likely pushing rate hike expectations off the table.
Technical Outlook: Despite the fundamental headwind, the AUDUSD showed resilience. The pair sold off to a low of 0.6627, testing a key swing area defined by the lows between 0.66247 and 0.6635. Buyers stepped in at this support zone, and the price bounced roughly 16 pips off the lows heading into the close.
Treasury Yields: The Short End Leads the Way Down
US Treasury yields moved lower on the back of the jobless claims report, with the curve steepening slightly as the short end outperformed.
2-Year Yield: 3.525% (–4.0 bps)
5-Year Yield: 3.715% (–4.0 bps)
10-Year Yield: 4.142% (–2.1 bps)
30-Year Yield: 4.793% (–0.2 bps)
30-Year Auction Results: The Treasury’s auction of 30-year bonds was solid, earning a grade of "B." While there was no disaster, the auction failed to spark a significant follow-through rally in the long bond, leaving the 30-year yield essentially flat on the day.
Commodities & Crypto: Precious Metals Shine
Crude Oil Tests Support Crude oil prices remained under pressure, falling $0.65 (–1.12%) to settle at $57.77. Critically, the price tested the major support level from November 25 at $57.10, hitting a low of $57.01 before bouncing. Holding this level is vital for the bulls to prevent a deeper breakdown.
Gold & Silver Surge Precious metals were the standout performers of the day, capitalizing on lower yields and a softer dollar:
Gold: Rallied sharply by $45.41 (+1.08%) to close at $4,273.
Silver: Continued its parabolic run, surging to $63.47. (For a deep dive into the technical breakout on metals, [CLICK HERE]).
Bitcoin Consolidates Bitcoin remained relatively quiet amidst the volatility in traditional assets, dipping slightly by $135 (–0.15%) to trade at $91,921, as it consolidates recent gains.
