AUD Holds Firm as Tensions with Iran Escalate and Fed Expectations Cool
The Australian Dollar (AUD) is trading in a tight range against the US Dollar (USD), maintaining its consolidative tone near Friday's peak.
This comes as market participants assess geopolitical and monetary policy risks, with tensions between the United States and Iran escalating.
AUD/USD is holding above the mid-0.7100 area in early European trading, despite softer US inflation readings dampening expectations for imminent Federal Reserve (Fed) policy tightening.
The planned US sanctions on Iran are sustaining a geopolitical risk premium, supporting the USD and limiting AUD gains.