Australian Dollar falls to 0.6945 USD amid Fed tightening expectations and ahead of key domestic inflation data.
The Australian Dollar declined 0.8% to 0.6945 against the US Dollar in European trading, underperforming major peers as risk aversion gripped markets. Investors priced in at least two Federal Reserve rate hikes this year, lifting the US Dollar Index 0.2% to 101.20, its highest level in over a year.
S&P 500 futures dropped 1.36% to near 7,370, reflecting broad risk-off sentiment. The AUD was the weakest against the Japanese Yen, while domestic focus shifts to upcoming May Consumer Price Index and employment data for further direction.
Market sentiment soured after hawkish Fed commentary and stronger-than-expected US jobs data reinforced expectations for prolonged tight monetary policy.