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AUD/USD attracts follow-through selling during Tuesday’s Asian session, looking to extend the overnight rejection slide from 0.7000, or a two-week top, following the release of RBA meeting Minutes. The US Dollar retains a bullish undertone near its highest level since April 2025 as energy-driven inflation risks keep December Fed rate hike bets firmly on the table. Adding to this, geopolitical risks further underpin the safe-haven USD.
USD/JPY is dropping below 158.50 in the Asian session on Tuesday, snapping a two-day winning streak and pulling back from an over two-week top touched the previous day, despite Japan's soft PPI inflation print. Bulls turn cautious amid speculation that authorities will step in to prop up the Japanese Yen, which, in turn, weighs on the pair.
Gold struggles above $4,150 in the Asian session on Tuesday as elevated US Treasury yields and a hawkish Fed keep the US Dollar near its highest level since April 2025. Adding to this, persistent geopolitical uncertainties stemming from Middle East conflicts continue to underpin the safe-haven buck, which, in turn, is seen as weighing on the bullion. Traders now look to US inflation figures for some impetus ahead of Fed Chair Kevin Warsh's appearance on Friday.
The FOMC minutes read as hawkish last week, but they predate the soft September payrolls print and the modest inflation reads since then. We continue to think the Fed will hold rates this month, since we expect a moderate (i.e. 0.2% or less) monthly core print in this week's inflation report for September.
