The Australian dollar slipped to around $0.69 on Tuesday, giving back the previous session’s gains as risk sentiment deteriorated following Iran’s denial that it was engaged in talks with the United States. President Donald Trump had announced a five-day delay to planned military strikes on Iranian power and energy infrastructure, but Tehran rejected reports of negotiations with Washington and accused those circulating such claims of seeking to distort markets.
The Aussie also came under pressure from weaker domestic data. Business activity disappointed, with the manufacturing PMI easing to a five-month low of 50.1 in March 2026, while the services PMI fell into contraction territory for the first time since January 2024, at 46.6.
Investors are now focused on Wednesday’s inflation report for guidance on the monetary policy outlook, against a backdrop of persistent uncertainty linked to tensions in the Middle East. At the same time, the European Union and Australia concluded a free-trade agreement, ending nearly a decade of negotiations aimed at deepening economic ties and reinforcing a rules-based international order that has been under strain from the Trump administration’s policies.
