Australian Dollar Rises as US Dollar Weakens on Fed Worries
On June 27, the Australian dollar (AUD/USD) moved higher and reached a weekly high. This happened because the US dollar stayed weak due to growing concerns about the Federal Reserve’s independence.
Reports suggest that President Trump might replace Fed Chair Jerome Powell this summer. This news made investors nervous, as such a move could impact the trust in the Fed. As a result, the market moved toward risk-sensitive currencies like the Australian dollar and away from safe-haven assets like the US dollar.
Another factor helping the Australian dollar is the improved global mood after the Israel–Iran ceasefire. Investors now feel more comfortable taking risks, which usually benefits the Aussie.
Traders are also watching the upcoming US PCE inflation data, which is expected soon. This report could give more insight into whether the Federal Reserve might change interest rates in the near future.
Impact:
If global risk appetite stays strong, AUD/USD could keep rising. However, surprising US inflation numbers or more Fed-related news might shift the trend.