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AUD/USD languishes near a 10-month low during the Asian session on Friday, awaiting a break below 0.6800 before the next leg up amid a bullish US Dollar. Firming Fed rate-hike expectations, along with fading hopes for US-Iran diplomacy, help the USD hold gains at its highest level since April 2025. Moreover, the RBA’s dovish tilt undermines the Aussie and backs the case for further losses.
USD/JPY enters a bullish consolidation phase around its highest level since early September as bulls turn cautious amid intervention risk near 160.00. Meanwhile, the downside seems cushioned as the wide US-Japan interest rate gap keeps the Yen carry trade active. Furthermore, the possibility of a jumbo Fed rate hike and Middle East uncertainties hold the US Dollar near a 19-month top, supporting the currency pair.
Gold rebounds slightly from Thursday’s YTD low, albeit it remains below $3,900 amid a bearish fundamental backdrop. A surge in Fed rate-hike expectations might continue to undermine the non-yielding bullion. Adding to this, fading hopes of a diplomatic resolution to the US-Iran conflict keep the safe-haven US Dollar firm near April 2025 highs, which further caps the commodity.
USD/JPY is approaching the psychologically important 160.00 round mark again, its highest level since early September, bringing the Japanese Yen dangerously close to levels that have previously triggered intervention by Japanese authorities.
Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.
