Australian Dollar weakens as global energy supply disrupts further

The Australian Dollar (AUD) underperforms its major currency peers, trading marginally down at around 0.7000 against the US Dollar (USD) during the European trading session on Wednesday. The antipodean faces selling pressure as oil prices have rallied further due to intensifying global energy supply risks.

The global energy supply mechanism has been disrupted further as Yemen's Iran-aligned Houthis announced a 'maritime embargo' on Saudi Arabia in retaliation for a Saudi blockade of ports and airports in Houthi-controlled north-western Yemen, in which the Bab el-Mandeb strait has been closed.

According to a Reuters report, around 7% of global energy is transited through the Bab el-Mandeb strait, the southern gateway of the Red Sea.

On the domestic front, investors await Australian labor market data for June, which will be released on Thursday. The employment report is expected to show that the economy created 15K fresh jobs, significantly lower than 40.3K in May. The Unemployment Rate is seen remaining steady at 4.4%.

Investors will closely track the Australian labor market data to get fresh cues regarding the Reserve Bank of Australia’s (RBA) monetary policy outlook.

Meanwhile, the US Dollar (USD) trades marginally lower, with investors shifting focus to the flash United States (US) S&P Global PMI data for July, which will be released on Friday.