FX.co ★ Aussie Dollar Approaches 2-Week Low

The Australian dollar slipped to around $0.70 on Wednesday, nearing a two-week low as investors remained cautious over US President Trump’s attempts to de-escalate the Iran conflict and digested softer domestic inflation data. Consumer prices were flat in February from the previous month, while annual inflation eased to 3.7% from 3.8%, undershooting expectations. Core inflation also printed below forecasts, pointing to a gradual moderation in underlying price pressures. Even so, inflation is still above the central bank’s 2–3% target band, leaving the policy outlook uncertain. Markets currently view the chances of another rate hike in May as finely balanced, and are still pricing in about 65 basis points of additional tightening over the remainder of 2026. At the same time, reports suggested the US was pursuing talks with Iran, including a proposed one-month ceasefire and a 15-point plan to resolve the conflict. However, the deployment of US ground troops to the region underscored that the risk of further escalation persists.