- The Australian dollar is expected to recover some daily losses as fears surrounding Israeli-Iranian tensions ease.
- Iran has reached out to several countries, including Oman, Qatar, and Saudi Arabia, to encourage President Trump to push for an immediate ceasefire.
- Market participants are awaiting the US retail sales figures for May, which will be released on Tuesday.
The Australian Dollar (AUD) is set to bounce back from its daily losses against the US Dollar (USD) on Tuesday. That said, the AUD/USD pairing is dealing with some hurdles as traders remain focused on ongoing geopolitical strains.
Interestingly, the generally optimistic and risk-sensitive AUD/USD has gained traction on reports that Iran has urged several nations, including Oman, Qatar, and Saudi Arabia, to influence President Trump towards securing a ceasefire. Additionally, there’s been a shift in risk sentiment as Canadian Prime Minister Mark Carney has reached an agreement with Trump regarding tariff negotiations within 30 days.
Leaders from the G7 have consistently asserted that Iran must not acquire nuclear capabilities. They emphasized that addressing this crisis could potentially diffuse broader tensions within the region.
Traders are also looking ahead to important labor data from Australia this week, which includes metrics on employment changes and unemployment rates. These figures are anticipated to be a key factor in assessing the strength of the domestic economy and how they might shape the Reserve Bank of Australia’s (RBA) policy decisions moving forward.
The Australian Dollar benefits from a weaker US Dollar, boosting risk sentiment
- The US Dollar Index (DXY), which gauges the dollar’s value against six major currencies, was around 98.20 at the time of writing. Eyes will be on the upcoming retail sales data for May on Tuesday, along with the Federal Reserve’s interest rate decisions planned for Wednesday.
- On Monday, President Trump called for the evacuation of Tehran, urging leaders of other countries to agree to terms restricting Iran’s nuclear programs, hinting that military actions may continue.
- “What a tragedy, a waste of human life. I’ve said repeatedly that Iran has no nuclear weapons,” Trump stated, adding that all should leave Tehran immediately.
- The University of Michigan (UOM) reported on Friday a rise in the consumer sentiment index from 52.2 to 60.5 in June, surpassing the expected 53.5.
- The US Producer Price Index (PPI) saw a slight increase of 0.1% month-on-month in May, contrasting with a prior decline of 0.2%. Core PPI, which excludes food and energy, also rose but was below market expectations.
- The Federal Reserve is likely to maintain its policy rates in the existing range during their upcoming decision. Traders are currently anticipating a rate cut of 25 basis points by September.
- According to Reuters, President Trump will be expanding steel tariffs starting June 23 to include imported “reinforced steel products,” also affecting household appliances like dishwashers and refrigerators.
- China’s retail sales experienced a year-on-year increase of 6.4% in May, outpacing the expected 5.0%. However, industrial production grew by 5.8% year-on-year but fell short of forecasts.
- Furthermore, China’s National Bureau of Statistics indicated that the domestic economy is expected to remain stable in the first half of 2025, though uncertainties around trade policies may challenge growth in the second quarter.
The Australian dollar tests the 0.6500 mark as it approaches the 9-day EMA
The AUD/USD trading pair is hovering around 0.6510 on Tuesday. Daily chart technical analysis suggests the pair remains in an upward trajectory, which generally favors a bullish outlook. The 14-day relative strength index (RSI) is also above the 50 threshold, indicating a positive sentiment. Moreover, the pair is above the nine-day exponential moving average (EMA), signaling strong short-term momentum.
The currency could aim for a new seven-month high of 0.6552 reached on June 16. If it breaks through this level, the next target might be an eight-month peak of 0.6687, situated near a rising channel cap at approximately 0.6730.
On the downside, if the AUD/USD pair tests the nine-day EMA at around 0.6506, it could subsequently approach the lower boundary at 0.6470. A move below this level might indicate declining bullish sentiment and increased pressure on the pair, possibly testing the 50-day EMA at 0.6431.
AUD/USD: Daily Charts
Australian dollar prices today
The Australian dollar (AUD) has exhibited notable movement against major currencies. It notably performed well against the Canadian dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | 0.02% | -0.06% | 0.05% | -0.21% | -0.20% | -0.09% | |
| EUR | 0.04% | 0.03% | 0.02% | 0.07% | -0.14% | -0.08% | -0.07% | |
| GBP | -0.02% | -0.03% | -0.10% | 0.04% | -0.17% | -0.15% | -0.10% | |
| JPY | 0.06% | -0.02% | 0.10% | 0.08% | -0.17% | -0.15% | -0.07% | |
| CAD | -0.05% | -0.07% | -0.04% | -0.08% | -0.32% | -0.17% | -0.14% | |
| AUD | 0.21% | 0.14% | 0.17% | 0.17% | 0.32% | 0.05% | 0.08% | |
| NZD | 0.20% | 0.08% | 0.15% | 0.15% | 0.17% | -0.05% | 0.02% | |
| CHF | 0.09% | 0.07% | 0.10% | 0.07% | 0.14% | -0.08% | -0.02% |
The heatmap indicates the changes in value between various major currencies with the Australian dollar highlighted as strong against the Canadian dollar.
