AUD/USD Edges Higher Above 0.7150 on US Treasury Buyback Concerns

During early Asian trading on Monday, AUD/USD was trading around 0.71737, slightly higher from the previous level above 0.7150, as the US dollar came under pressure from market concerns over the US Treasury's expanded long-term bond buyback program.

**US Treasury Buyback Concerns Weigh on USD**

Market worries that the US Treasury will expand its long-term government bond buyback program pushed the US dollar slightly lower against the Australian dollar. According to reports, US Treasury Secretary Scott Bessent earlier stated that the Treasury may expand its bond buyback scale to over $40 billion, partly to signal that current yields do not reflect the underlying economic fundamentals. Traders viewed this buyback strategy as only a temporary fix, which weighed on the US dollar.

**AUD Upside May Be Capped by Employment Data**

Weak Australian labor data could limit the Australian dollar's upside. Data released earlier by the Australian Bureau of Statistics showed that employment unexpectedly fell by 15,800 jobs in July, missing market expectations of a 15,000 increase, pushing the unemployment rate up to 4.5%. Ray White Chief Economist Nerida Conisbee said the rise in unemployment slightly strengthens the case for the Reserve Bank of Australia to hold interest rates steady, especially amid signs of broader economic softening.

**Focus Turns to US Economic Data**

Markets are now looking ahead to upcoming US economic data for further direction on the US dollar. BNY analysts noted that Australia's employment backdrop is further cooling, with the labor market losing momentum, while the federal debt has climbed above $1 trillion. Against the interplay of US Treasury buyback concerns and Australian economic data, AUD/USD may remain range-bound in the near term.