Aussie Heads for Sharp Weekly Rise

2026-04-10 01:36 By Joshua Ferrer 1 min. read

The Australian dollar held above $0.707 on Friday, staying at a three-week high and on track for its strongest weekly gain since mid January as a two-week ceasefire in the Middle East conflict lifted global risk sentiment and weighed on the US dollar.

Markets are now focused on upcoming diplomatic talks where US Vice President JD Vance is set to lead discussions in Islamabad this weekend.

However, uncertainty lingered as Israeli strikes on Lebanon continued despite signals of potential direct negotiations, while disruptions in the Strait of Hormuz added concerns to global energy flows.

President Trump also warned of possible escalation if ceasefire terms are not upheld, including concerns over Iran's attempts to impose charges on ships passing through the Strait.

In Australia, the Reserve Bank has already raised rates twice this year to 4.10%, with inflation still stuck above their target range.

Markets price a 60% chance of another hike in May and see rates near 4.65% by year-end.



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Aussie Heads for Sharp Weekly Rise
The Australian dollar held above $0.707 on Friday, staying at a three-week high and on track for its strongest weekly gain since mid January as a two-week ceasefire in the Middle East conflict lifted global risk sentiment and weighed on the US dollar. Markets are now focused on upcoming diplomatic talks where US Vice President JD Vance is set to lead discussions in Islamabad this weekend. However, uncertainty lingered as Israeli strikes on Lebanon continued despite signals of potential direct negotiations, while disruptions in the Strait of Hormuz added concerns to global energy flows. President Trump also warned of possible escalation if ceasefire terms are not upheld, including concerns over Iran's attempts to impose charges on ships passing through the Strait. In Australia, the Reserve Bank has already raised rates twice this year to 4.10%, with inflation still stuck above their target range. Markets price a 60% chance of another hike in May and see rates near 4.65% by year-end.
2026-04-10
Australian Dollar Holds Gains
The Australian dollar held its recent gains to around $0.703, staying at a three-week high as investors assessed the durability of the Middle East ceasefire. The agreement, which includes Iran’s commitment to reopen the Strait of Hormuz, initially triggered a sharp unwind in US dollar safe-haven demand and lifted risk-sensitive currencies. However, optimism is fading at the margins, with reports indicating the 10-point framework has yet to secure full commitment from both sides, leaving the agreement viewed as fragile and incomplete. The conflict, now in its second month, has pushed energy prices higher and heightened inflation risks, reinforcing expectations that global central banks may keep policy tighter for longer. In Australia, the Reserve Bank has already lifted rates by 50 basis points to 4.10% amid persistently elevated inflation. Markets are now pricing in a roughly 55% chance of another hike in May, easing from 70% last week, but see rates at 4.61% by year-end.
2026-04-09
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