AUD/USD Recovers Above 0.6400 as USD Dips, Tensions Ease


The AUD/USD pair steadies above the 0.6400 support level in early Friday trading. The recovery follows easing Middle East tensions and signs of a risk-on market sentiment.

Key Factors:

  • Geopolitical Risk Diminishes: Iran’s reports of limited damage to nuclear facilities and signaling no immediate retaliation ease concerns, reducing safe-haven demand for the USD.
  • Risk-On Sentiment: Improving market sentiment boosts riskier assets like the AUD.
  • US Treasury Yields Fall: Declining US Treasury yields weaken the USD.
  • Fed Rhetoric: Fed policymakers continue to endorse higher interest rates, citing strong labor demand and wage increases, but recent market dynamics are limiting the USD’s gains.
  • RBA Outlook: Weakened Australian employment data for March reinforces expectations for earlier rate cuts by the RBA, potentially weighing on the AUD.


The AUD/USD outlook remains dependent on the broader market sentiment and geopolitical developments. While the easing of tensions supports the AUD, the underlying support for the USD due to the US economic outlook and the potential for further rate hikes could limit the AUD’s gains.


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