AUD/USD falls to near 0.6300 as risk aversion intensifies amid US tariff concerns

• AUD/USD weakens as the US Dollar strengthens on safe-haven demand amid rising risk aversion driven by US tariff concerns.
• Fed Chair Jerome Powell acknowledged the difficulty in evaluating the broader inflationary impact of tariffs.
• The Australian Dollar faces pressure as traders reassess the RBA's monetary policy outlook following disappointing jobs data.

AUD/USD remains under pressure for a second consecutive day, hovering around 0.6300 during Asian trading on Friday. The pair struggles as the US Dollar (USD) strengthens, supported by safe-haven demand amid growing risk aversion linked to US tariff policies. Meanwhile, US bond yields are declining as investors flock to Treasuries in response to economic and geopolitical uncertainties.

Federal Reserve (Fed) Chair Jerome Powell downplayed the inflationary impact of tariffs, calling it temporary, but acknowledged the challenges in assessing broader effects. While recession risks have risen, Powell suggested they remain relatively low for now.

On the data front, US Initial Jobless Claims increased to 223K for the week ending March 15, slightly missing estimates of 224K and exceeding the previous week's revised figure of 221K (from 220K). Additionally, the Philadelphia Fed Manufacturing Survey for March eased to 12.5 MoM, down from February's 18.1. This marked the second consecutive monthly decline, though the drop was less severe than the expected 8.5.

The Australian Dollar (AUD) also faces headwinds as traders reassess the Reserve Bank of Australia's (RBA) monetary policy stance following weaker-than-expected jobs data. Australia's unemployment rate remained steady at 4.1% in February, but an unexpected decline in employment raised concerns about labor market weakness.

The disappointing jobs report has fueled speculation that sustained labor market softness could provide the RBA with more flexibility to ease interest rates. However, RBA Assistant Governor Sarah Hunter noted earlier in the week that while the board acknowledged room to reduce policy restrictiveness--following the recent decision to ease--it remains more cautious than markets about additional rate cuts.