AUD/USD dips below 0.70 as commodity-sensitive currencies underperform

• Commodity selloff weighs on the AUD on Thursday.
• US Dollar Index climbs to daily highs above 97.80.
• Latest market chatter on the U.S.-China trade conflict hurts the sentiment.

After closing the previous two trading days with losses, the AUD/USD pair extended its slide and dipped below the 0.70 mark for the first time in a week to approach the multi-month lows that it set at 0.6987 on April 25. As of writing, the pair was losing 0.2% on a daily basis at 0.6998.

The commodity selloff triggered by a sharp drop in crude oil prices is weighing on the AUD on Thursday. Copper futures, which generally shows a strong correlation with the AUD's market valuation, lost more than 4% on Wednesday and was last seen down 0.8% on the day.

On the other hand, the bullish momentum surrounding the greenback gathered strength today, lifting the US Dollar Index to a fresh 2-day high of 97.85 and forcing the pair to continue to push lower. Yesterday, FOMC Chairman Powell ignored the soft inflation in the U.S. during the press conference and sounded optimistic regarding the GDP growth in the remainder of the year to hurt the probability of a Fed rate cut later this year.

Today's data from the U.S. showed that factory orders rose more than expected in March while the ISM NY's Business Conditions Index improved to 77.3 in April from 66.9 in March and surpassed the market expectation of 66.7.

Tomorrow's macroeconomic calendar won't be featuring any data releases from Australia and investors will be waiting for the NFP data from the U.S. Previewing the data, "We’re calling for a +160K print. The unemployment rate, for its part, may stay put at 3.8% if, as we believe, the household survey shows a modest increase in employment,” said NBF analysts.

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