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Australian dollar rebounds against USD as tariff, Iran risks weigh
AUD/USD is trading higher after slipping from a near five-week high, with tariffs, Iran tensions, and oil gains supporting the dollar.
The Australian dollar is rebounding versus the US dollar, with AUD/USD attracting some buying during the Asian session after reversing part of Thursday's move down toward its weekly trough, according to FXStreet.
FXStreet points to a mixed backdrop for the currency pair: the US dollar is posting strong weekly gains, while escalating US-Iran tensions are lifting crude oil to its highest level since June 11. That oil strength has fueled inflation concerns and increased expectations for Federal Reserve rate hikes, helping limit upside for AUD/USD.
The report also cites trade and risk factors weighing on the Australian currency. It notes that the Trump administration is set to impose sweeping new tariffs of between 10% and 12.5% on 60 top trading partners, covering nearly all US imports, which tempers risk appetite and supports safe-haven USD.
On the support side, AUD/USD is getting help from better-than-expected Australian flash PMIs that signal a second consecutive month of expansion for the broader private sector, following upbeat employment data. Traders are also looking ahead to flash US PMIs and the highly anticipated two-day FOMC meeting next week, which will shape near-term dollar direction and therefore the AUD/USD outlook.
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