Geopolitical risks and higher oil prices drive the Australian Dollar lower against the US Dollar ahead of key employment data.
The AUD/USD pair fell to 0.7095 in early Asian trading on Wednesday, pressured by escalating Middle East tensions and rising crude oil prices. The US Dollar strengthened as a safe-haven asset amid uncertainty over potential military actions in the region.
Traders await Australia’s April employment report, due Thursday, following the Reserve Bank of Australia’s (RBA) May rate hike to 4.35%. The RBA minutes revealed most board members cited inflation risks from the Gulf conflict as justification for tightening. Meanwhile, the People’s Bank of China held its Loan Prime Rates steady at 3.00% and 3.50%.
Ongoing geopolitical rhetoric, including US threats of further strikes and Iran’s vow to respond, continues to weigh on risk-sensitive currencies like the AUD. Market focus remains on developments in the Middle East and upcoming economic data.