Australian Dollar softens to near 0.7000 as Vice President canceled trip to talks with Iran
The AUD/USD pair loses momentum to near 0.7010 during the Asian trading hours on Friday. The Australian Dollar (AUD) softens against the US Dollar (USD) after reports that US Vice President JD Vance canceled his trip to talks with Iran in Switzerland, raising concerns about the US-Iran peace deal.
CNN reported on Friday that the White House indicated that the first round of technical talks with Iran under the memorandum of understanding signed this week will not take place on Friday. Vance said that the meeting wasn’t yet finalized, as it’s difficult for the Iranian officials to get out of Iran. Vice President added that he thought he would travel to Switzerland at some point this weekend.
Traders will closely monitor the developments surrounding the peace agreement. A lack of progress in US-Iran or any signs of renewed tensions in the Middle East could boost a safe-haven currency such as the Greenback and act as a headwind for the major pair.
Furthermore, the hawkish stance of the US Federal Reserve (Fed) might contribute to the USD’s upside. The US central bank on Wednesday decided to hold the interest rates steady in a 3.50% to 3.75% range as Kevin Warsh began his era in charge with a sweeping policy review. Fed officials signaled the chance of higher rates as they assess the impacts of the Iran war on inflation.
"We've seen very spectacular data in the U.S. that's been surprising to the upside since late April, then the Fed was as hawkish as market expectations could ever have been, so we've seen more dollar upside," said Sarah Ying, head of FX strategy at CIBC Capital Markets.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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