Aussie Rallies to 3-Week High

2026-04-08 00:47 By Joshua Ferrer 1 min. read

The Australian dollar jumped to above $0.707, hitting a three-week high as global risk sentiment improved and the US dollar weakened after US President Trump announced a two-week suspension of military operations against Iran.

The move came just before a deadline that would have triggered intensified strikes, with Trump instead announcing a “double-sided ceasefire” linked to Iran’s agreement to reopen the Strait of Hormuz.

He also said the US had received a 10-point Iranian proposal that could serve as a foundation for negotiations, with the two-week window intended to finalize a broader settlement.

The ceasefire could reshape the inflation outlook, potentially easing pressure on the RBA to tighten policy further.

Markets had been pricing a rate hike toward 4.35% or higher at the May meeting, partly driven by elevated energy prices after the Strait’s closure.

Still, analysts warned that supply conditions could take months to fully normalize even if a lasting agreement is reached.



News Stream
Aussie Rallies to 3-Week High
The Australian dollar jumped to above $0.707, hitting a three-week high as global risk sentiment improved and the US dollar weakened after US President Trump announced a two-week suspension of military operations against Iran. The move came just before a deadline that would have triggered intensified strikes, with Trump instead announcing a “double-sided ceasefire” linked to Iran’s agreement to reopen the Strait of Hormuz. He also said the US had received a 10-point Iranian proposal that could serve as a foundation for negotiations, with the two-week window intended to finalize a broader settlement. The ceasefire could reshape the inflation outlook, potentially easing pressure on the RBA to tighten policy further. Markets had been pricing a rate hike toward 4.35% or higher at the May meeting, partly driven by elevated energy prices after the Strait’s closure. Still, analysts warned that supply conditions could take months to fully normalize even if a lasting agreement is reached.
2026-04-08
Aussie Dollar Remains Subdued
The Australian dollar remained weak around $0.690, staying near two-month lows as caution built ahead of US President Trump’s deadline regarding the Strait of Hormuz. Washington set a firm deadline for Iran to reopen the Gulf to shipping or face potential attacks on critical infrastructure if demands are not met. Heightened risks around the closure of the key oil chokepoint have driven energy prices sharply higher and reinforced demand for the US dollar as a safe haven. While hopes for a last-minute diplomatic breakthrough have helped cap further decline, sentiment remained fragile, with traders closely watching the 8pm Eastern Time deadline. Meanwhile, domestic data showed a sharp downturn in activity, with Australia’s S&P Global PMI slipping into contraction in March for the first time in about 18 months. The services index dropped to 46.3 from 52.8, while the composite eased to 46.6, pointing to weaker private sector activity amid geopolitical tensions and rising fuel costs.
2026-04-07
Aussie Pressured Near 1-Month Low
The Australian dollar rose to around $0.692, but remained near a one-month low as investors weighed fresh developments in the Middle East war. Reports suggest the US, Iran, and regional mediators are discussing terms for a potential 45-day truce that could open the door to a broader de-escalation. This tentative optimism follows President Trump issuing a renewed ultimatum and stepping up threats against Iran’s civilian infrastructure if the Strait of Hormuz is not reopened, a demand Tehran has so far rejected, keeping the vital shipping route effectively constrained. For Australia, expectations for tighter policy continue to build, with markets leaning toward another rate hike at the May meeting as elevated oil prices and a still-tight labor market sustain inflation pressures. Analysts expect the Reserve Bank of Australia to deliver up to three additional hikes in 2026, potentially lifting the cash rate to 4.85%, a level last seen in late 2008.
2026-04-06