The Australian dollar dipped roughly 0.25% against the US dollar on Tuesday. The drop follows a shift in market sentiment after President Trump indicated he would retaliate against Iran, following a helicopter incident in the Strait of Hormuz. As a result, AUD/USD is now trading at 0.7027, having previously reached a six-week low of 0.7005.
AUD/USD Drops Amidst Geopolitical Tensions and CPI Worries
The atmosphere in the market has turned gloomy due to escalation in the Middle East, giving President Trump the opportunity to fulfill his promise of responding to Iranian provocations. In a post on social media, he declared that US Central Command conducted an attack on Iran on Tuesday as a retaliation measure.
According to the US Dollar Index (DXY), oil prices faced a downturn despite some recovery, with WTI prices falling by around 3%. Meanwhile, the US dollar managed to recover from earlier losses, finishing nearly unchanged.
Recent U.S. Economic Statistics showed the NFIB Small Business Optimism Index at 95.3, which is below the 52-year average of 98.0. This suggests that businesses hold a more pessimistic view of the economic landscape. The survey revealed that 34% of surveyed firms plan to increase prices in the next three months. Additionally, many industries, particularly agriculture and wholesale trade, are experiencing labor shortages, prompting small and medium-sized businesses to scale back hiring plans.
Attention is now focused on the US Consumer Price Index (CPI) for May set to be released on Wednesday. This data may shed light on how the ongoing conflict with Iran is affecting inflation.
Most economists surveyed by Reuters anticipate that the U.S. Federal Reserve will maintain current interest rates for the remainder of the year. Nearly 70% of 102 economists speculate that the federal funds rate could settle between 3.50% to 3.75%. Money markets are currently anticipating a 22 basis point (bp) increase in rates toward the year’s end.
Some members of the Federal Open Market Committee have already indicated the possibility of needing to raise interest rates later this year.
In Australia, consumer sentiment took another hit in June as inflation and rising fuel costs strained household budgets. Research from the National Australia Bank (NAB) reveals that business conditions have stabilized as of May.
NAB economists have adjusted their predictions regarding further tightening by the Reserve Bank of Australia (RBA) after three rate hikes this year. “We no longer foresee the RBA raising rates by 25 basis points in August and now expect the cash rate to peak at the current level of 4.35%,” stated Sally Auld, NAB’s chief economist.
AUD/USD Price Prediction: Technical Perspective
On the daily chart, AUD/USD is at 0.7024, trading below the 50-day, 100-day, and 200-day simple moving averages (SMAs) around 0.7132, which increases the bearish outlook in the short term. The pair is navigating along a series of rising support trendlines, hinting at a wider uptrend being tested. The relative strength index is close to 36 (14), signaling it is gaining downward momentum but has yet to enter oversold territory.
The immediate resistance line is found in the SMA cluster of the 50/100/200-day near 0.7132, with a broader downside resistance line reinforcing the upper limit of potential gains. Conversely, consecutive upward trending support lines from 0.6833 and 0.6897 are supporting the pair, and it remains to be seen if buyers can defend these lower trending points to avoid a more profound decline within the overarching bullish framework.
Today’s Australian Dollar Price
The table below outlines today’s percentage change of the Australian Dollar (AUD) against major currencies, showcasing the AUD’s strongest performance against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | australian dollar | new zealand dollar | swiss franc | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.03% | -0.23% | 0.11% | -0.01% | 0.29% | -0.14% | 0.06% | |
| EUR | 0.03% | -0.17% | 0.17% | 0.02% | 0.38% | -0.08% | 0.14% | |
| GBP | 0.23% | 0.17% | 0.34% | 0.20% | 0.52% | 0.10% | 0.31% | |
| JPY | -0.11% | -0.17% | -0.34% | -0.14% | 0.18% | -0.25% | -0.05% | |
| CAD | 0.01% | -0.02% | -0.20% | 0.14% | 0.32% | -0.09% | 0.11% | |
| australian dollar | -0.29% | -0.38% | -0.52% | -0.18% | -0.32% | -0.42% | -0.21% | |
| new zealand dollar | 0.14% | 0.08% | -0.10% | 0.25% | 0.09% | 0.42% | 0.21% | |
| swiss franc | -0.06% | -0.14% | -0.31% | 0.05% | -0.11% | 0.21% | -0.21% |
The heat map indicates the percentage change between major currencies. The selected base currency comes from the left column, while the quote currency is from the top row. For example, selecting Australian Dollars from the left and then moving horizontally to US Dollars shows the percentage change reflected in the box—signifying AUD (base)/USD (quote).
