AUD Under Pressure as Risk-Off Sentiment Grips Markets Ahead of FOMC Decision

Geopolitical tensions and anticipation for the Federal Reserve's (FOMC) decision pushed investors into risk-off mode, affecting currency markets. In particular, the Australian Dollar (AUD/USD) is expected to be subdued due to the uncertainty surrounding interest rates in the US.

The FOMC meeting will likely see a 25-basis-point rate hike, with traders eyeing the update to the Summary of Economic Projections (SEP), also known as the 'dot-plot', and Fed Chair Kevin Warsh's press conference. This has led to a cautious approach in markets, with most G8 FX currency pairs pegged to the US Dollar expected to trade quietly.

In contrast, the Reserve Bank of Australia (RBA) Governor Michelle Bullock is set to speak on September 17, providing insight into the country's economic outlook. Meanwhile, the AUD/USD pair holds above a cluster of simple moving averages around 0.7074 and within a broader sequence of upward-sloping trend-line supports.