AUD Holds Above $0.7000 Amid RBA Hawkishness
The Australian Dollar has maintained its upward momentum in early European trading this Tuesday, holding above the 0.7000 psychological threshold against the US Dollar.
This comes as markets react to reports of potential diplomatic progress between the United States and Iran regarding the Strait of Hormuz, which has eased concerns over energy supply disruptions and spurred a 'risk-on' environment favorable to commodity-linked currencies like the Aussie.
The Reserve Bank of Australia's (RBA) commitment to its inflation mandate remains a key driver of the AUD/USD pair, with Governor Michele Bullock maintaining a hawkish tone in recent remarks.
Rabobank analysts have noted that while the Australian Dollar has been one of the top-performing G10 currencies year-to-date, rising 4.9% against the US Dollar, net short positions against the Aussie have increased for six consecutive weeks, reaching levels not seen since September 2025.
The near-term outlook for the AUD remains tethered to both domestic policy markers and international labor data, with investors currently pricing in at least one additional interest rate hike for the remainder of 2026.