AUD/USD slipped to around 0.7025 as Middle‑East tensions lifted the dollar and traders await China’s PMI and the RBA rate decision.

The Aussie dollar fell to roughly 0.7025 against the greenback in early Asian trading on Monday, marking a break below the 0.7050 level. The move was driven by heightened geopolitical risk in the Middle East, which pushed investors toward the safety of the U.S. dollar.

Geopolitical backdrop fuels dollar strength

• Iran’s supreme leader called for renewed confrontation with the United States and Israel, raising concerns of further escalation.
• The heightened tension is seen as a catalyst for safe‑haven demand, supporting the USD and pressuring risk‑on currencies such as the AUD.

Policy expectations shape the Aussie outlook

• The Federal Reserve kept its policy rate unchanged at 3.75‑4.00% and markets now price a 72.9% chance of a December hike, according to CME FedWatch.
• The Reserve Bank of Australia is expected to raise its cash rate by 25 basis points to 4.85% on Tuesday, with the odds of a hike climbing to about 78% after the latest data.
• TD Securities notes that the market already embeds a high probability of a November hike, limiting any further upside for the AUD from policy expectations alone.

What traders are watching next

• China’s RatingDog Manufacturing PMI, due later Monday, could influence risk sentiment and the AUD’s trajectory.
• The RBA’s November decision will confirm whether the 4.85% target is reached and may set the tone for future moves.
• Technical levels: the 100‑day simple moving average remains a ceiling for AUD/USD, while support sits near 0.7000.

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This article is compiled from international market news for information only. It is not investment advice.