AUD Rises as US-Iran Optimism Lifts Risk-Sensitive Currencies
The Australian Dollar (AUD) has gained momentum above 0.7020 in early European trading on Tuesday, as optimism surrounding US-Iran talks and a potential deal regarding the Strait of Hormuz lifts risk-sensitive currencies like the Aussie.
US President Donald Trump said on Monday that talks with Iran are underway, describing it as Tehran's 'last chance' to secure a deal to end the five-month conflict. However, Iranian officials denied holding talks with the US, saying they were speaking with Oman about the Strait of Hormuz.
The Reserve Bank of Australia (RBA) maintains a hawkish tone despite cooler inflation data, with Governor Michele Bullock warning that underlying inflation remains too high and policymakers are prepared to raise interest rates again if needed. Markets continue to fully price in one more RBA rate hike this year, which would take the Official Cash Rate (OCR) to 4.60%.