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Australian dollar slides as oil jumps on Red Sea supply fears
The drop comes as the Bab el-Mandeb strait is closed, with Reuters cited saying about 7% of global energy transits through the route.
FXStreet reports the Australian dollar is weakening versus major peers, trading marginally lower at around 0.7000 against the US dollar during the European session on Wednesday.
The outlet links the sell-off to firmer oil prices driven by intensifying global energy supply risks, including a Reuters-cited disruption connected to Yemen’s Iran-aligned Houthis announcing a maritime embargo on Saudi Arabia and the Bab el-Mandeb strait being closed.
FXStreet also points to upcoming macro catalysts for AUD, with investors awaiting Australia’s June labor market data due Thursday. The report expects employment to add 15K jobs versus 40.3K in May, while the unemployment rate is seen holding at 4.4%.
On the US side, the US dollar is described as trading marginally lower as attention turns to upcoming flash S&P Global PMI data for July on Friday, per FXStreet. The piece notes that Australia’s employment figures will help inform expectations for Reserve Bank of Australia monetary policy.