FX.co ★ Australian Dollar Remains Subdued

On Monday, the Australian dollar maintained its recent slide, stabilizing at approximately $0.648, influenced by escalating geopolitical tensions in the Middle East. Market sentiment was subdued as risk aversion intensified, following renewed hostilities between Israel and Iran over the weekend. These hostilities involved targeted assaults on respective energy infrastructures, heightening fears of a more extensive regional conflict and thereby increasing demand for the safe-haven US dollar. Furthermore, persistent trade uncertainties added to the pressure on the Aussie, as markets continued to process the ambiguous framework of a provisional US–China trade agreement announced the previous week. Concurrently, mixed economic indicators from China for May did little to bolster the Australian currency; retail sales showed modest growth, industrial production experienced a slight deceleration, and fixed asset investment fell short of expectations, reflecting inconsistent progress in China’s economic recovery. Domestically, upcoming data on the job market will be scrutinized for insights into Australia's economic condition and its potential implications for the Reserve Bank of Australia's interest rate policy.