Australian Dollar holds steady below 0.6900 on US–Iran talks uncertainty
The AUD/USD pair trades on a flat note around 0.6895 during the early Asian session on Monday. Traders continue to assess the developments surrounding talks to end the US war with Iran. The Reserve Bank of Australia (RBA) will publish the minutes of its monetary policy meeting on Tuesday. All eyes will be on the US employment report later on Thursday.
Reuters reported on Sunday that the US and Iran agreed to pause recent hostilities in the Gulf and renew talks regarding their dispute over the Strait of Hormuz. Both countries plan to meet in Qatar on Tuesday.
This development came after several days of strikes and counterstrikes since an Iranian projectile hit a cargo vessel in the Strait of Hormuz on Thursday, with both Washington and Tehran accusing the other of breaking an interim ceasefire that was agreed to on June 17.
However, uncertainty remains high and any signs of rising tensions in the Middle East could provide some support to a safe-haven currency such as the US Dollar (USD) and create a headwind for the pair.
On the Aussie’s front, the latest Australian employment data might help limit the Aussie’s losses. The country’s Unemployment Rate dropped to 4.4% in May from 4.5% in April, the Australian Bureau of Statistics (ABS) reported on Thursday. The figure came in line with the market consensus. Markets have priced in nearly a 19% chance of an RBA rate hike for August 10–11, according to the ASX RBA Rate Indicator.
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