AUD Stuck in Range as Hawkish RBA Offset by Geopolitical Risks

The Australian Dollar (AUD) is stuck in a range near 0.7050 due to conflicting factors influencing its value. On one hand, the Reserve Bank of Australia's (RBA) hawkish outlook, led by Governor Michele Bullock, has supported the AUD and the AUD/USD pair. Bullock emphasized that upside risks to inflation persist and that the RBA is prepared to raise interest rates again if price pressures fail to show sufficient downward progress.

However, concerns about inflation risks stemming from volatile oil prices due to the US-Iran standoff are tempering bets on an immediate interest rate hike by the Federal Reserve (Fed) in the US. This has kept geopolitical risks on the table, supporting the safe-haven Greenback and capping the AUD/USD pair.

The recent range-bound price action around 0.7050 makes it prudent to wait for some follow-through buying before positioning for an extension of a one-and-a-half-month-old uptrend. Moving ahead, investors will focus on the US economic docket, including the release of the Producer Price Index (PPI) and Weekly Initial Jobless Claims data.