AUD Stalls Near 0.7100 as USD Recovers from Two-Month Low
The Australian Dollar (AUD) has stalled near the 0.7100 mark as USD gains traction, recovering from its two-month low. The AUD/USD pair turned lower after a modest uptick in the Asian session on Tuesday.
The US Dollar's recovery is attributed to inflation jitters stemming from higher oil prices and geopolitical risks. President Donald Trump said that the US will not extend its Memorandum of Understanding (MoU) with Iran, which expired on Monday.
Trump also repeated his idea of declaring the critical Strait of Hormuz as a US territory and warned he would target Oman if it hindered actions to reopen the strategic waterway. This move has kept the geopolitical risk premium in play, supporting the safe-haven Greenback.
The focus is on the release of FOMC Minutes due on Wednesday, which may provide cues about the Fed's future policy path. Strategists at Rabobank highlight that Governor Bullock moved swiftly to counter the market's initial dovish interpretation of the RBA's latest decision.