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Australian dollar rises above 0.70 as Iran deal hopes lift risk sentiment
AUD/USD was up 0.5% near 0.7035, while markets cut expectations for a September Fed rate hike to 56.9% from 67.2% a day earlier.
FXStreet reports AUD/USD is trading around 0.7035, up about 0.5% on the day, with gains driven by improving risk sentiment linked to US Treasury Secretary Scott Bessent saying an agreement with Iran to reopen the Strait of Hormuz could be reached as soon as Tuesday or Wednesday.
The move also comes as Bessent’s comments triggered a sharp decline in oil prices, which the report says helped ease concerns about tighter global energy supplies. That backdrop has supported the Australian dollar, a currency that often benefits during stronger investor confidence, while investors also weigh the possibility of easing Middle East tensions.
FXStreet also points to Australian data and central bank messaging. It cites ANZ-Indeed job ads rising 2% in July after a 0.2% decline in the prior month, and the TD-MI Inflation Gauge rebounding 1% month over month, with RBA Governor Michele Bullock warning underlying inflation remains too high and could reaccelerate, supporting expectations for a restrictive policy stance.
In the US, attention turns to the July employment report due Friday, which the report says could influence expectations for how long the Federal Reserve keeps rates restrictive. It adds that, according to the CME FedWatch Tool, the probability of a September rate hike fell to 56.9% from 67.2% a day earlier as investors reassessed the outlook, alongside the lower energy-price backdrop.