Australian Dollar recovers slightly; firm USD to cap the upside ahead of FOMC Minutes
- AUD/USD stages a modest recovery from the vicinity of its lowest level since April 14.
- Geopolitical risks and rising Fed rate hike bets lift the safe-haven USD to a six-week top.
- Traders now look to the release of FOMC Minutes before positioning for a firm direction.
The AUD/USD pair attracts some buyers following an intraday dip to the 0.7085 region on Wednesday and moves away from its lowest level since April 14, touched the previous day. Spot prices climb to the 0.7115 area during the first half of the European session, though any meaningful appreciation seems elusive amid a bullish US Dollar (USD).
Investors remain skeptical about a potential US-Iran peace deal amid major disagreements over Tehran's nuclear program and the critical Strait of Hormuz. In fact, US President Donald Trump said on Tuesday that America may need to strike Iran again if a deal is not reached. This keeps geopolitical risks in play, which, along with hawkish US Federal Reserve (Fed) expectations, lifts the USD to a six-week high and might cap the upside for the AUD/USD pair.
Investors remain worried that the war-driven surge in energy prices will rekindle inflationary pressure and force the US Federal Reserve (Fed) to tighten its monetary policy. According to the CME group's FedWatch Tool, traders are now pricing in over a 50% chance that the US central bank will hike interest rates by at least 25 basis points (bps) in 2026. This remains supportive of elevated US Treasury bond yields and backs the case for a further USD appreciation.
The USD bulls, however, might opt to wait for more cues about the Fed's policy path before placing fresh bets. Hence, the focus will remain glued to the release of FOMC Minutes later today. In the meantime, some repositioning trade prompts intraday short-covering and offers some support to the AUD/USD pair. The fundamental backdrop, however, makes it prudent to wait for strong follow-through buying before confirming that spot prices have bottomed out.
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.27% | 1.17% | 0.99% | 0.55% | 1.81% | 1.91% | 1.23% | |
| EUR | -1.27% | -0.11% | -0.37% | -0.73% | 0.56% | 0.66% | -0.06% | |
| GBP | -1.17% | 0.11% | -0.30% | -0.62% | 0.60% | 0.75% | 0.03% | |
| JPY | -0.99% | 0.37% | 0.30% | -0.36% | 0.90% | 0.95% | 0.27% | |
| CAD | -0.55% | 0.73% | 0.62% | 0.36% | 1.27% | 1.31% | 0.65% | |
| AUD | -1.81% | -0.56% | -0.60% | -0.90% | -1.27% | 0.10% | -0.62% | |
| NZD | -1.91% | -0.66% | -0.75% | -0.95% | -1.31% | -0.10% | -0.70% | |
| CHF | -1.23% | 0.06% | -0.03% | -0.27% | -0.65% | 0.62% | 0.70% |
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).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
