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AUD/USD retreats as geopolitical risks increase, limiting US Dollar weakness
Saturday, 14 June 2025 04:14 WIB | AUD/USD |AUD/USD,

The Australian Dollar (AUD) is weakening against the US Dollar (USD) on Friday, with price action being guided by a combination of factors.

The two primary drivers of the recent move have been increasing geopolitical risks and interest rate expectations, which are likely to continue influencing near-term price movements.

At the time of writing, AUD/USD is trading below 0.6500, with intraday losses of 0.60%.

Market sentiment remains fragile following the escalation of tensions in the Middle East. Reports overnight say that Israel launched targeted strikes on Iranian nuclear and military sites, killing several senior officials.

This has led to heightened fears of a broader regional conflict. It has also underpinned safe-haven demand for the US Dollar, limiting risk appetite and pressuring high-beta currencies, such as the Australian Dollar.

On the data front, the University of Michigan's preliminary Consumer Sentiment Index for June showed an improvement in household confidence.

However, both one-year and five-year Consumer Inflation Expectations moved slightly lower, reinforcing this week's softer-than-expected US CPI and PPI prints.

Looking ahead, focus turns to key Chinese data due Monday, including Industrial Production and Retail Sales for May, which could heavily influence AUD/USD due to Australia's strong trade ties with China.

Source: Fxstreet

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