AUD/USD Under Pressure as Tensions with Iran Drive USD Demand
The Australian Dollar (AUD) continues to struggle against the US Dollar (USD), which has seen a notable recovery after hitting a one-week low following the Federal Reserve's (Fed) decision on Wednesday.
Escalating tensions between the US and Iran, as well as bets for a Fed rate hike, have driven demand for the safe-haven USD. The AUD/USD pair has failed to capitalize on its late rebound from the 0.6920 region, or an over two-week low, and remains under pressure amid reduced bets for an immediate Reserve Bank of Australia (RBA) rate hike.
US data releases, including the Advance Q2 GDP and Personal Consumption Expenditures (PCE) Price Index, will be closely watched as they influence market expectations about the Fed's policy path. This, in turn, is expected to drive USD demand and cap the AUD/USD pair.