AUD/USD trades under pressure near 0.6920 on Wednesday, even after the US Dollar (USD) held firm amid geopolitical risk and caution ahead of the Federal Open Market Committee (FOMC) Minutes.
The Australian Dollar (AUD) struggled to gain traction as investors moved toward the Greenback after United States (US) President Donald Trump said the interim memorandum of understanding with Iran was “over,” adding that he did not want to engage with Tehran
Trump also added to broader uncertainty after saying he had ordered Treasury Secretary Scott Bessent to cut off all trade with Spain, calling Madrid a “terrible partner” in NATO. Although the direct impact on AUD/USD is limited, the comments reinforced a risk-off tone across markets, weighing on growth-sensitive currencies such as the Aussie. On the China side, investors will keep a close eye on the next Purchasing Managers Index (PMI) signals as Australia’s outlook remains closely tied to Chinese demand for commodities.
The latest official data showed China’s Manufacturing PMI improved to 50.3 in June, while the Non-Manufacturing PMI rose slightly to 50.2, suggesting activity remains in expansion but remains fragile. Attention now turns to the Federal Open Market Committee (FOMC) Minutes from the June 16-17 meeting, the first under Fed Chair Kevin Warsh. A hawkish tone could keep the USD supported and limit AUD/USD recovery attempts.