The Australian dollar held weak near $0.690, hovering around two-month lows as investors turned cautious ahead of US President Trump’s deadline related to the Strait of Hormuz. Washington set a firm timetable for Iran to reopen the Gulf to commercial shipping or face potential strikes on critical infrastructure if its demands are not met.
Escalating risks of disruption at this key oil chokepoint have driven energy prices sharply higher and strengthened demand for the US dollar as a safe-haven asset. Expectations of a possible last-minute diplomatic breakthrough have limited further losses in the Australian currency, but overall sentiment remained fragile, with traders closely focused on the 8 p.m. Eastern Time deadline.
On the domestic front, data pointed to a sharp deterioration in economic activity. Australia’s S&P Global PMI slipped into contraction in March for the first time in about 18 months. The services PMI dropped to 46.3 from 52.8, while the composite index fell to 46.6, signaling weakening private-sector conditions amid heightened geopolitical tensions and rising fuel costs.
