Weekly FX Update
13 July 2026
The Strait of Hormuz Is Back in the Spotlight
Just when markets appeared to be settling into a quieter rhythm, geopolitics returned to centre stage.
Over the weekend, renewed military action between the United States and Iran led to the closure of the Strait of Hormuz—the world’s most important oil shipping route. Roughly 20% of global oil supply passes through this narrow waterway. The immediate result was a jump in oil prices and renewed demand for the US dollar as investors sought safe-haven assets.
What’s Driving Markets This Week
- Oil prices jumped after the Strait of Hormuz was closed, increasing concerns about inflation and global energy supply. Brent crude rose around 3.3% in early trading.
- The US dollar strengthened as investors moved into traditional safe-haven assets amid renewed geopolitical uncertainty. The Australian dollar eased against the USD.
- US inflation takes centre stage. This week’s CPI and PPI reports could significantly influence expectations for future Federal Reserve policy.
What’s Happening
Despite finishing last week on a firmer footing, the Australian dollar starts this week facing renewed pressure from a stronger US dollar and rising oil prices.
AUD/USD finished last week around 0.695, recovering modestly on Friday after softer US employment data, but today’s geopolitical developments are likely to dominate trading early this week.
Markets will be watching whether this latest Middle East escalation proves temporary or develops into a broader disruption to global energy supplies..
Key Exchange Rates
| Pair | Latest Level* | |||||||||||
| AUD/USD | 0.695 | |||||||||||
| AUD/EUR | 0.598 | |||||||||||
| AUD/GBP | 0.515 | |||||||||||
| AUD/JPY | ~112.0 | |||||||||||
| AUD/CNH | ~4.86 | |||||||||||
| AUD/NZD | ~1.08 |
Commodities Snapshot
| Commodity | Latest Level | ||||||||||
| Brent Crude | US$78.49/bbl ▲ | ||||||||||
| WTI Crude | Around US$74–75/bbl ▲ | ||||||||||
| Gold | Higher on safe-haven demand | ||||||||||
| Silver | Modestly firmer | ||||||||||
| Iron Ore | Relatively stable |
Key Economic Events This Week (Sydney Time)
| Day | Time (Sydney) | Event | Why It Matters | |||||
| Monday, 13 July | During the day | China trade data | Early indication of Chinese external demand and regional momentum | |||||
| Tuesday, 14 July | 12:00pm | China Q2 GDP, industrial production and retail sales | Major AUD and Asian-currency event | |||||
| Tuesday, 14 July | 10:30pm | U.S. CPI inflation | Principal USD event; important for Fed-rate expectations | |||||
| Wednesday, 15 July | 10:30pm | U.S. PPI inflation | Pipeline-inflation signal and follow-up to CPI | |||||
| Wednesday–Thursday | Overnight | Fed Chair Warsh’s congressional testimony | Guidance on rates, inflation and the Fed policy framework | |||||
| Thursday, 16 July | 11:30am | Australian labour-force report | Key domestic event for AUD and RBA expectations | |||||
| Thursday, 16 July | 10:30pm | U.S. retail sales and jobless claims | Measures consumer resilience and labour-market conditions | |||||
AUD Outlook
The Australian dollar is likely to remain volatile this week.
The combination of higher oil prices, geopolitical uncertainty and key US inflation data creates a challenging backdrop for the AUD. If US CPI surprises on the upside, markets may increase expectations for further Fed tightening, providing additional support for the US dollar. Conversely, easing geopolitical tensions or softer inflation could help the AUD recover.
Expected AUD/USD trading range: 0.690 – 0.705.
Quick Take
✅ Geopolitics has taken over from economics—for now.
✅ Oil and US inflation are the biggest themes this week.
✅ US CPI and China’s GDP will be the key market movers.