Australian Dollar Hits Two-Month Low vs USD

The Australian dollar weakened against the US dollar on Friday, extending losses for a fourth consecutive day and reaching fresh two-month lows around 0.6866, as heightened geopolitical tensions in the Middle East bolstered the greenback's safe-haven appeal.

The AUDUSD currency pair, a key barometer of global risk sentiment, has declined more than 2 percent over the week, marking its sharpest weekly drop since October. Traders attributed the pressure primarily to ongoing uncertainties surrounding US-Iran relations, including Iran's rejection of ceasefire proposals and additional US troop deployments in the region. These developments have driven investors toward the US dollar, the world's primary reserve currency, for funding and protection amid market stress. The US Dollar Index, which measures the greenback against a basket of major currencies, rose above 100.19, positioning it for a weekly gain of over 0.5 percent.

Compounding the downside, rising oil prices have indirectly supported the dollar, as global crude transactions are predominantly denominated in USD. The effective closure of the Strait of Hormuz has exacerbated energy supply concerns, pushing crude benchmarks higher...