The Australian dollar weakens as signs of escalating US-Iran tensions emerge

Iran attacked several ships and an oil port in the United Arab Emirates on Monday. Richard Franulovich from Westpac Banking Corporation commented: “Over the past 24 hours, the situation has shifted from a standoff posture to more overt escalation by force, impacting risk assets.” The head of foreign exchange strategy group said this “may explain why, after the Reserve Bank of Australia’s interest rate hike decision, the Australian dollar only recorded a slight increase and struggled to rise further.” Franulovich added: “If the conflict continues to escalate, the Australian dollar may eventually test the lower bound of 0.7100.” Data from London Stock Exchange Group shows the Australian dollar fell 0.4% to $0.7141.