AUD Struggles Below 0.7100 as FOMC Decision Looms

The Australian Dollar (AUD) has been struggling to hold above the 0.7100 mark, as the US Dollar (USD) firms up ahead of the crucial two-day Federal Open Market Committee (FOMC) policy meeting.

Market players expect the FOMC to maintain its hawkish stance amid inflation risks stemming from higher energy prices, which could lead to a further increase in interest rates and bolster the USD.

The US 10-year Treasury bond yield has surpassed the 5.0% threshold for the first time since 2023, acting as a tailwind for the Greenback and weighing on the AUD/USD pair.

Geopolitical uncertainties, particularly the intensifying US-Iran tensions, are also contributing to the safe-haven demand for the USD and putting pressure on the AUD/USD pair.