AUD/JPY Extends Losing Streak Amid Escalating Global Tensions
The Australian Dollar (AUD) has continued its decline against the Japanese Yen (JPY), extending its losing streak to four consecutive days. The AUD/JPY currency cross traded around 110.70 during European hours on Thursday, as rising tensions in the Middle East fueled increased risk aversion globally.
Escalating tensions between Iran and the US have weighed heavily on global markets, with a series of tanker attacks threatening to disrupt energy supplies from the Gulf. This has driven oil prices higher, intensifying inflationary pressures that are already feeding into Australia's consumer prices.
Market participants are growing increasingly confident in the possibility of a fourth Reserve Bank of Australia (RBA) interest rate hike this year, following warnings of upside inflation risks from Deputy Governor Andrew Hauser and RBA Assistant Governor Sarah Hunter. This would limit the AUD's downside potential.