Aussie and Kiwi Strengthen as Oil Prices Fall Amid Middle East Diplomatic Efforts

The Australian and New Zealand dollars gained ground on Monday as hopes for a diplomatic solution to the Middle East conflict led to lower oil prices, easing inflation concerns.

The Aussie rose 0.2% to $0.7001, while the Kiwi added 0.2% to $0.5798 after ending last week down 1%, weighed mainly by losses against its Australian counterpart.

A stronger-than-expected jobs report led markets to almost fully price in a fourth interest-rate increase from the Reserve Bank of Australia this year, with the annual rate expected to rise to 3.7% in the second quarter.

RBA Governor Michele Bullock's speech on Tuesday could strike a hawkish tone given the recent escalation in the Gulf conflict, but economists expect the central bank to hold steady in August assuming no significant upside surprise to core inflation this week.