AUD Struggles at 0.7000 as RBA Remains Cautious on Inflation

The Australian Dollar (AUD) has been struggling to surpass the 0.7000 threshold against the US Dollar, despite its constructive outlook above its critical 200-day SMA at 0.6900.

The pair's pickup in selling pressure comes from the resurgence of tensions in the Middle East and the US Dollar being slightly bid ahead of the Federal Reserve's (Fed) upcoming meeting.

Australia's economy, however, remains healthy and stable, with solid domestic demand and decent economic growth figures supporting the Reserve Bank of Australia's (RBA) cautious stance on interest rates.

The RBA left its Official Cash Rate unchanged at 4.35% in June, citing still-sticky inflation as a key upside risk, despite the labor market remaining relatively resilient.