AUD Retreats from High as Oil Prices Slide Amidst Fed Decision Anticipation

The Australian dollar pulled back from its earlier high of 0.7011 on Monday as oil prices declined, but it remains above Friday's close amidst anticipation for Australia's Consumer Price Index (CPI) and the Federal Reserve's interest rate decision.

Risk appetite improved after a temporary pause in hostilities between the US and Iran led to lower oil prices, which lifted global stock and bond markets. West Texas Intermediate crude oil was trading at around $83.70 per barrel, down over 7%, tempering inflation concerns and slightly reducing expectations of an immediate Federal Reserve rate hike.

This development provided some support to risk-sensitive currencies, including the Australian dollar. The focus now shifts to upcoming economic events, including Reserve Bank of Australia Governor Michele Bullock's speech on Tuesday, the US ADP Employment Change four-week average, and Australia's June CPI release on Wednesday.