Home Daily Commentaries Aussie dollar trades below US$0.65 influenced by geopolitical tensions and shifting investor sentiment

Aussie dollar trades below US$0.65 influenced by geopolitical tensions and shifting investor sentiment

Brett Ottawa
Written by
Brett Ottawa

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market.

| Monday 16 June, 2025

Daily Currency Update

Last week, the Australian dollar (AUD) experienced notable volatility against the US dollar (USD), primarily influenced by escalating geopolitical tensions and shifting investor sentiment. The AUD/USD exchange rate closed at 0.6487, marking a 0.7% decline from the previous day. This drop was attributed to a surge in demand for safe-haven assets following Israeli airstrikes on Iranian nuclear facilities, which heightened global geopolitical risks. According to UOB Group's FX analysts, the AUD/USD pair is currently trading within a range between 0.6430 and 0.6550. The major support level is identified at 0.6430, suggesting limited downside risk in the near term. The outlook for this week analysts suggests that the AUD/USD pair may continue to trade within the established range, with geopolitical developments and central bank policies being key factors to watch in the coming weeks. Investors should remain attentive to these dynamics as they could lead to further fluctuations in the exchange rate.

Key Movers

On Friday, June 13, 2025, the Dow Jones Industrial Average (DJIA) closed at 42,197.79, marking a significant decline of 769.83 points, or 1.8%, for the day. This drop was primarily driven by escalating geopolitical tensions between Israel and Iran, which led to a surge in oil prices and heightened market volatility. The broader market also experienced downturns, with the S&P 500 falling 1.1% and the Nasdaq Composite declining 1.3%. The Producer Price Index (PPI) data released midweek showed annualized core PPI inflation easing to 3.0%, while headline PPI inflation rose to 2.6%. These figures were below market expectations, providing a brief rebound for the DJIA. Looking ahead and investors are closely monitoring the Federal Reserve's upcoming meeting for insights into potential interest rate adjustments. However, persistent uncertainties regarding inflation, trade policies, and geopolitical tensions may continue to influence market movements. The University of Michigan's Consumer Sentiment Index for June 2025 has shown a significant rebound, marking the first improvement in six months. Despite these positive developments, 44% of consumers still anticipate being financially worse off in a year, the highest level since records began in 1978. The final June 2025 data is scheduled for release on Friday, June 27, 2025.

Expected Ranges

  • AUD/USD: 0.6400 - 0.6600 ▼
  • AUD/EUR: 0.5500 - 0.5700 ▼
  • GBP/AUD: 2.0800 - 2.1000 ▲
  • AUD/NZD: 1.0700 - 1.0900 ▲
  • AUD/CAD: 0.8700 - 0.8900 ▼

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.

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