Australian Dollar slumps to near 0.7050 amid escalating Middle East tensions

The AUD/USD pair tumbles to around 0.7055 during the early Asian session on Monday. The US Dollar (USD) strengthens against the Australian Dollar (AUD) amid escalating tensions in the Middle East after the United States (US) and Israel launched a "massive" and ongoing attack against Iran's leadership and military. 

The US and Israel are engaged in major combat operations against Iran, following a massive joint military strike launched on Saturday. Iranian state television confirmed that Iran's Supreme Leader Ayatollah Ali Khamenei was killed in an airstrike in Tehran on Saturday. Iran responded with missile and drone attacks targeting Israel and regional US military bases in Kuwait, Bahrain, Qatar, and Jordan. This raises fears of wider conflict in the Middle East, which underpins the safe-haven currencies such as the Greenback and acts as a headwind for the pair. 

Traders will closely monitor the developments surrounding the US-Iran tensions. However, some analysts warn that US policy turbulence under the current administration could weigh on the USD against the Aussie.