AUD/USD Stalls Amid Geopolitical Oil Risks and Looming Fed Decision

The Australian Dollar (AUD) finished Tuesday's session flat after bouncing off daily lows of 0.7204 but failed to sustain its gains as higher oil prices pushed the US Dollar higher.

The Greenback gained strength due to rising geopolitical tensions, specifically the attacks on US Navy vessels by Iranian Oil vessels in retaliation for previous attacks on warships.

This escalation led to increased inflationary pressures favoring the US Dollar, especially with most investors anticipating a 0.25% rate hike by the Federal Reserve next week.

The data-wise outlook is also supportive of the Greenback's strength as households expect a dip in three- and five-year inflation expectations in August, according to the NY Fed Survey of Consumer Expectations.