Australian Dollar weakens as Iran rebuffs Trump’s plan for new round of peace talks
The AUD/USD pair attracts some sellers to near 0.7140 during the early Asian session on Monday. Escalating tensions between the US and Iran continue to weigh on the Australian Dollar (AUD) against the US Dollar (USD). The US March Retail Sales report will be in the spotlight later on Tuesday.
The Iranian state TV reported on Sunday that Tehran rejected new peace talks with the US following US President Donald Trump's post on Truth Social, indicating US representatives were heading to Pakistan for another round of negotiations on Monday.
Iran has blocked the Strait of Hormuz since the US and Israel struck on February 28. On Friday, it announced that the waterway would reopen. However, it reversed that decision on Saturday after Trump declined to lift a US blockade of Iranian ports. Iran’s decision to walk away from negotiations and ongoing geopolitical risks could boost a safe-haven currency such as the Greenback and create a headwind for the pair in the near term.
On the other hand, the hawkish stance of the Reserve Bank of Australia (RBA) might help limit the AUD’s losses. Markets have priced in nearly a 70-72% probability of a third consecutive hike to 4.35% at the May 5 meeting, driven by sticky inflation and a resilient labor market.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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