The AUD/USD pair dropped for a third consecutive day on Tuesday, hovering around 0.6870 during the Asian session. The Australian dollar is under pressure as the US dollar shows signs of weakening, driven by growing hawkish sentiment regarding the Federal Reserve’s policy outlook. Traders are now keeping an eye on the upcoming minutes from the Reserve Bank of Australia’s latest meeting and key PMI data from China, expected later in the day.
Currently, market expectations suggest there’s almost a 60% probability of the Fed raising interest rates by September, as indicated by the CME FedWatch tool. This shift is making traders focus on significant labor market reports this week, culminating in the nonfarm jobs report set for Thursday, which could offer fresh insights into the Fed’s interest rate plans. Economists are anticipating a payroll increase of 114,000 for June, while the unemployment rate is expected to remain steady at 4.3%.
The US dollar has also gained traction as a safe-haven asset amid ongoing geopolitical tensions, particularly concerning U.S.-Iran relations. President Trump announced new talks between the two nations to be held in Doha, Qatar, following weekend hostilities in the region, according to a report by CNBC.
However, the Iranian government quickly denied this claim, stating that no negotiating meetings with the US were organized and their focus remains on adhering to the existing memorandum of understanding, rather than pursuing new agreements.
