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Australian Dollar weakens after consumer inflation expectations cool in July
AUD/USD slipped toward 0.7000 after inflation expectations eased 0.8% to 4.7%, while safe-haven demand rose amid renewed US-Iran military developments.
AUD/USD eased after two days of gains, trading around 0.7000 in Asian hours as the Australian Dollar held losses.
FXStreet attributed the move to a decline in consumer inflation expectations in July, which fell by 0.8% to 4.7% from 5.5% previously. Inflation expectations also moderated for a third straight month after a trimmed mean inflation expectations spike in April, while wage expectations were unchanged for the past eight months.
The broader currency backdrop also shifted, with the pair moving deeper into negative territory as safe-haven demand increased on expectations of heightened tensions involving Iran. FXStreet cited multiple US strike waves against Iranian coastal military assets, a reinstated naval blockade, and a report that missiles were fired into an oil tanker’s smokestack in the Strait of Hormuz.
FXStreet also pointed to Federal Reserve Chair Kevin Warsh’s comments, saying his testimony suggested inflation pressure would not be permanent, while acknowledging current measures remain unsatisfactory. The outlet noted the speech was scored 5.4 out of 10 by the FXS Speechtracker and that the overall message was balanced, limiting immediate implications for the dollar and risk sentiment.