Australian Dollar stays on the defensive against a broadly firmer USD, ahead of US data

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AUD/USD struggles to attract any meaningful buyers amid a goodish pickup in USD demand.
Escalating US-Iran tensions and Fed rate hike bets support USD ahead of the crucial macro data.
Reduced bets for an immediate RBA rate hike undermine the Aussie and favor bearish traders.

The AUD/USD pair struggles to capitalize on the previous day's late rebound from the 0.6920 region, or an over two-week low, and seesaws between tepid gains/minor losses through the early European session on Thursday. Spot prices currently trade just above mid-0.6900s, nearly unchanged for the day, though the near-term bias seems tilted in favor of bearish traders.

The US Dollar (USD) recovers from a one-week low, touched in the aftermath of the FOMC decision on Wednesday, and is seen as a key factor acting as a headwind for the AUD/USD pair. The rapidly changing inflation dynamics due to volatile oil prices keep US Federal Reserve (Fed) rate hike bets firmly on the table. This, along with a further escalation of tensions between the US and Iran, helps revive demand for the safe-haven Greenback.

In the latest development, the US launched strikes against Iran in response to surprise Iranian missile attacks on American forces based in the Middle East on Tuesday. This comes on top of joint US-Saudi strikes against Iran-aligned terrorists in Iraq and raises the risk of a broader regional conflict. Moreover, reports suggest that Iran-backed Houthis in Yemen are considering imposing fees on commercial ships sailing through the southern Red Sea.

Adding to this, the US-Iran standoff over the Strait of Hormuz adds to concerns about significant disruptions to global energy supplies and continues to support crude oil prices. This, in turn, fuels worries about energy-driven inflation and backs the case for policy tightening by the Fed, which favors USD bulls and should continue to cap the AUD/USD pair amid reduced bets for an immediate rate hike by the Reserve Bank of Australia (RBA).

Traders now look to the US economic docket – featuring the release of the Advance Q2 GDP and the Personal Consumption Expenditures (PCE) Price Index. The crucial data would influence market expectations about the Fed's policy path, which, in turn, will drive the USD demand. Apart from this, the incoming geopolitical headlines should infuse volatility in financial markets and provide some meaningful impetus to the AUD/USD pair.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.27%	0.23%	0.16%	0.11%	0.06%	-0.18%	0.40%
EUR	-0.27%		-0.05%	-0.11%	-0.17%	-0.23%	-0.46%	0.13%
GBP	-0.23%	0.05%		-0.04%	-0.12%	-0.17%	-0.41%	0.22%
JPY	-0.16%	0.11%	0.04%		-0.07%	-0.10%	-0.36%	0.27%
CAD	-0.11%	0.17%	0.12%	0.07%		-0.04%	-0.29%	0.33%
AUD	-0.06%	0.23%	0.17%	0.10%	0.04%		-0.22%	0.35%
NZD	0.18%	0.46%	0.41%	0.36%	0.29%	0.22%		0.65%
CHF	-0.40%	-0.13%	-0.22%	-0.27%	-0.33%	-0.35%	-0.65%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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