The AUD/USD pair attracts fresh sellers following an intraday uptick to the 0.7120-0.7125 region and extends its steady intraday descent through the first half of the European session on Tuesday. Spot prices slide back closer to mid-0.7000s in the last hour, with bears eyeing the lower boundary of a multi-week-old trading range support amid a broadly firmer US Dollar (USD).
Traders have been trimming their bets for three interest rate cuts by the US Federal Reserve (Fed) in 2026 amid sticky inflation. Furthermore, the rapid escalation of geopolitical tensions in the Middle East continues to drive flows towards traditional safe-haven assets, which, in turn, lifts the USD to a fresh high since January 20 and undermines the perceived riskier Aussie.
US President Donald Trump said the big wave is yet to come. Secretary of State Marco Rubio added that the US is preparing for more attacks in Iran over the next 24 hours. Meanwhile, the US State Department urged citizens to leave Middle East countries immediately due to serious risks.
This continues to weigh on investors’ sentiment and boosts the USD’s global reserve currency status, overshadowing the hawkish Reserve Bank of Australia (RBA). In fact, RBA Governor Michelle Bullock said the Board remains uncertain whether financial conditions are restrictive enough to return inflation to the midpoint of the target range within a reasonable timeframe.
In the absence of any relevant market-moving data, the incoming geopolitical headlines will drive the USD demand and provide some impetus to the AUD/USD pair ahead of the Australian Q4 GDP report on Wednesday. Nevertheless, the aforementioned mixed fundamental backdrop makes it prudent to wait for a break below the trading range before placing fresh bearish bets.
Economic Indicator
Gross Domestic Product (QoQ)
The Gross Domestic Product (GDP), released by the Australian Bureau of Statistics on a quarterly basis, is a measure of the total value of all goods and services produced in Australia during a given period. The GDP is considered as the main measure of Australian economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.
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Source: https://www.fxstreet.com/news/australian-dollar-hangs-near-trading-range-support-vs-usd-as-focus-shifts-to-aussie-gdp-202603030903
