Forex News: Australian Dollar Rises On Iran War De-escalation Hopes

Australian Dollar Rises On Iran War De-escalation Hopes

(RTTNews) - The Australian dollar strengthened against other major currencies in the European session on Monday, on hopes of Iran war de-escalation.

According to some media reports, the US, Iran, and regional mediators are discussing a possible 45-day ceasefire that might result in a lasting end to the conflict.

The unnamed individuals stated that there is little prospect of an agreement being reached in the next 48 hours.

According to the report, US President Donald Trump stated that the US is in extensive talks with Iran and that a deal is probably going to be reached before his deadline on Tuesday.

The stronger-than-expected U.S. jobs data and rising oil prices linked to the Iran conflict bolstered hopes that Federal Reserve will maintain high rates this year.

The March U.S. employment data showed a strong rebound from February's weak numbers. The U.S. economy added 178,000 jobs in March, well above the consensus estimate of 59,000 while the jobless rate dropped to 4.3 percent from 4.4 percent, driven by a big drop in labor force participation. In an effort to fight sticky inflation, the Reserve Bank of Australia (RBA) increased the Official Cash rate (OCR) to 4.10% during its March meeting. Because of the tight labor market and rising oil prices, market expectations for the May meeting point toward another possible rate hike.

Analysts at Westpac predict that the Australian central bank will raise interest rates three more times in 2026. As a result, the cash rate would reach 4.85%, its highest level since November 2008.

In the European trading today, the Australian dollar rose to near 2-week high of 110.53 against the yen and 1.6667 against the euro, from early lows of 110.01 and 1.6719, respectively. If the aussie extends its uptrend, it is likely to find resistance around 112.00 against the yen and 1.65 against the euro.

Against the U.S. and the Canadian dollars, the aussie advanced to a 4-day high of 0.6932 and a 5-day high of 0.9650 from early lows of 0.6885 and 0.9601, respectively. The aussie may test resistance around 0.70 against the greenback and 0.97 against the loonie.

The aussie edged up to 1.2121 against the NZ dollar, from an early low of 1.2106. On the upside, 1.22 is seen as the next resistance level for the aussie.

Looking ahead, Canada S&P Global services PMI for March and U.S. ISM services PMI for March are slated for release in the New York session.

Most regional stock markets remained closed for holidays. Australia, New Zealand and Hong Kong celebrate Easter, mainland China and Taiwan celebrate Qingming Festival, the tomb-sweeping holiday.

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