AUD Slides Below $0.7100 as Jobs Data Looms
The Australian Dollar (AUD) has hit a one-week low against the US Dollar (USD), trading below $0.7100 ahead of Thursday's jobs data release. The AUD/USD pair weakened further after disappointing flash PMIs showed a slowdown in services activity and contraction in manufacturing, tempering expectations of a follow-through rate hike by the Reserve Bank of Australia.
The softer data contributed to a prevailing US Dollar (USD) buying interest, with the USD Index advancing to a fresh high since July 30. Geopolitical uncertainties, including tensions between the US and Iran, continue to underpin the safe-haven USD, weighing on the AUD/USD pair. Despite hopes for a diplomatic resolution, Iranian Foreign Minister Abbas Araghchi met with US Special Envoy Steve Witkoff, restating Tehran's conditions for reopening the Strait of Hormuz.
Crude oil prices dropped to an over two-week low in reaction to the positive development, easing inflation fears and keeping US bond yields depressed. However, this has little impact on the strong bullish tone surrounding the USD, suggesting the path of least resistance for the AUD/USD pair is downward.