The Australian dollar weakened beyond 0.70 per US dollar on Monday, extending the previous week’s losses as escalating tensions in the Middle East continued to weigh on global risk appetite. With the conflict showing no signs of abating, investors have scaled back exposure to risk-sensitive currencies such as the Australian dollar. Elevated geopolitical risks have also heightened concerns about a potential spike in oil prices, which could fuel global inflationary pressures.
Domestically, Energy Minister Chris Bowen said Australia holds fuel reserves covering 36 days of petrol, 34 days of diesel, and 32 days of jet fuel, well below the 90-day benchmark recommended by the International Energy Agency. The Aussie also came under additional pressure from a stronger US dollar, as markets priced in a likely pause in the Federal Reserve’s interest rate-cutting cycle. The greenback drew further support from safe-haven demand amid intensifying geopolitical strains, with President Donald Trump calling for Tehran’s unconditional surrender.
