AUD Surges Above 0.7000 on Hopes of Iran Deal and Strong Domestic Data

The Australian Dollar (AUD) surged above 0.7000 on Tuesday, rising 0.50% as hopes of an Iran deal lifted risk sentiment. US Treasury Secretary Scott Bessent's comments that a pact to reopen the Strait of Hormuz could be reached as soon as Tuesday or Wednesday triggered a sharp decline in oil prices and eased concerns over global energy supplies.

The improvement in risk sentiment is supporting the AUD, which typically performs well during periods of stronger investor confidence. While Iranian officials previously denied holding direct negotiations with Washington, investors are currently focusing on the prospect of easing tensions in the Middle East.

The AUD is also drawing support from encouraging domestic data. The ANZ-Indeed Job Ads rose by 2% in July, and the TD-MI Inflation Gauge rebounded by 1% MoM, marking its first increase since April. These developments reinforce concerns that inflationary pressures are re-emerging.

Reserve Bank of Australia (RBA) Governor Michele Bullock recently reiterated that underlying inflation remains too high and warned that price pressures could accelerate further due to previous energy market disruptions.