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Australian dollar jumps as USD weakens and gold rises
AUD/USD climbed about 0.85% on Friday to around 0.7180 as Treasury bond buyback expansion and Iran sanctions rhetoric weighed on the dollar.
The Australian dollar extended a late week push higher, rising about 0.85% on Friday to fresh current leg highs near 0.7180, according to Action Forex. The move accelerated from a steadier climb earlier in the week, with AUD/USD reaching the high 0.71s within a few sessions.
Action Forex attributed the rally largely to a weaker USD backdrop, alongside rising gold prices and broader strength across Asian currencies and Australia’s mining dividend season. It also pointed to US Treasury Secretary Scott Bessent’s announcement to expand Treasury bond buybacks, plus escalating sanctions rhetoric toward Iran, as factors that reinforced dollar weakness.
The outlook for the week includes Australia’s July CPI, RBA August meeting minutes and key GDP partials, though Action Forex said these likely take a secondary role versus US developments. It also noted US bond yields have risen sharply since March, with the 30-year yield reaching highs last seen in 2007, while the dollar traded near a multi month low around 98.55 for the DXY index.
Action Forex added that gold and Bitcoin rallied as investors sought alternatives to US assets, and it cited concerns about the sustainability and potential escalation risks tied to long dated yield containment efforts. The outlet also referenced the US debt level surpassing $40 trillion for the first time and rising government debt, as well as investors demanding a higher risk premium amid geopolitical tensions and uncertainty about the future policy path.
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