AUD Set for Weekly Loss Amid US Dollar Surge and Rising Oil Prices

The Australian dollar has been stuck below $0.72 for several days, and it's now on track to close out the week in the red as the US dollar gains strength.

This gain is largely due to a sharp rise in Treasury yields, which followed lower-than-expected purchases by the US Treasury Department during its first expanded buyback operation.

Additionally, oil prices have risen above $100 per barrel amid escalating Middle East tensions, further fueling inflation concerns and expectations that central banks will maintain tighter monetary policies for longer.

The Reserve Bank of Australia is now seen as having an 84% chance of increasing its cash rate by 25 basis points at its upcoming meeting this month, with markets predicting the cash rate to reach 4.85% by early next year - a level not seen since 2008.