Australian Dollar slides to 0.70 as US ISM PMI, revives the US Dollar
The Aussie Dollar retraces despite an overall risk-on mood as the US Dollar recovers some ground, sponsored by positive data, and easing geopolitical tensions in the Middle East. The AUD/USD trades at 0.7000 after reaching a daily high of 0.7050.
The Australian Dollar (AUD) plunged to 0.70 against the US Dollar (USD) as the US Dollar gained strength, driven by positive economic indicators and reduced Middle East tension. The AUD/USD pair peaked at 0.7050 during the day before slipping to its current level. This decline followed a 7.7% drop in US Oil prices, due to progress in US-Iran talks, which lowered expectations for Federal Reserve rate hikes.
Meanwhile, Japan's yen was supported by intervention in foreign exchange markets. The US ISM Manufacturing PMI for July rose to 55.6, indicating steady manufacturing growth, despite rising input costs. The upcoming US economic data, such as employment figures and Nonfarm Payrolls, will be critical in determining the currency's trajectory.
If the labor market remains strong, higher inflation could prompt the Federal Reserve to raise interest rates. Meanwhile, in Australia, the RBA sets interest rates, and China's economic performance significantly impacts the AUD, as it is Australia's largest trading partner. Iron Ore prices, the country's top export, also play a crucial role in determining the AUD's value.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
