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Australian dollar steadies near 0.7220 as oil boosts the US dollar
Oil strength helped lift the Greenback, keeping AUD/USD near 0.7219 as markets look ahead to the Fed decision next week.
The Australian dollar ended Tuesday’s session roughly flat after bouncing off its daily low of 0.7204, but it could not hold gains as higher oil prices pushed the US dollar higher, according to FXStreet, citing the US Dollar Index (DXY). At the time of writing, AUD/USD was trading around 0.7219.
FXStreet also pointed to geopolitics around attacks on US Navy vessels in retaliation involving Iranian oil shipments, which it said is adding to inflationary pressures. With investors focused on a 0.25% rate hike by the Federal Reserve next week, the view that policy could stay relatively hawkish has supported the Greenback, the outlet said.
On the data front, the NY Fed Survey of Consumer Expectations showed households expecting lower three- and five-year inflation in August, while the NFIB Small Business Optimism Index fell to 98.7 in August, still above the long-term average of 98.0. FXStreet noted that one third of companies expect to raise prices in August, with 28% projecting price increases.
FXStreet added that it sees a constructive near-term bias for AUD/USD as long as it holds above key moving averages around 0.7051, with the Relative Strength Index near 68 suggesting momentum is firm but could pause. It also cited an initial support area near 0.7198.
Latest closeDollar index 98.84 ▼0.3%