The Australian dollar climbed back above $0.70, extending the previous week’s modest 0.4% advance and rebounding from a recent two‑month low as global risk appetite improved following news of an interim peace agreement between the US and Iran. The deal reportedly includes sanctions relief for Iran, the lifting of blockades, and the dismantling of Tehran’s nuclear program.
The agreement boosted sentiment across financial markets, triggering a rally in Asian equities, a weaker US dollar, and a sharp decline in oil prices. It also eased pressure on central banks ahead of a busy week of policy meetings.
In Australia, markets have now fully priced out the possibility of a June rate hike, as a run of soft economic data has reinforced evidence that the Reserve Bank’s three rate increases earlier this year are starting to bite. The probability of an August move has also fallen sharply, to around 35% from more than 80% a month earlier. Investors will be watching the May CPI report, due on June 24, for clearer signals on the persistence of underlying inflationary pressures.
