Hormuz Tensions Send AUD/USD Sliding from Two-Month Highs

The Australian Dollar has retreated from its two-month highs against the US Dollar as tensions in the Strait of Hormuz escalate, boosting the Greenback's safe-haven appeal.

AUD/USD traded just below 0.7100 on Tuesday, sliding from Monday's high, but still holding a mildly bullish bias above both the 20-period Simple Moving Average (SMA) and the 100-period SMA.

The decline owes little to Australian data and is largely driven by geopolitics, with Iran's top negotiator and parliament speaker Mohammad Bagher Qalibaf stating that the Strait of Hormuz will remain closed until Washington meets the terms of an interim deal signed in June.

A UK Maritime Trade Operations agency reported a vessel was struck by an 'unknown projectile' while transiting the Strait, further increasing tensions. US President Donald Trump said there are no talks scheduled with Iran and that the US naval blockade remains in full force.