Australian dollar rises on US-Iran peace deal hopes

The Australian dollar strengthened against the US dollar on Monday, trading around 0.7160 during early Asian hours, as reports of progress toward a peace deal between the United States and Iran bolstered risk appetite and weighed on the safe-haven greenback.

The move follows two days of losses for the currency pair, with the Australian dollar finding support from expectations that a US-Iran agreement could ease geopolitical tensions. According to reports, the two nations are nearing an agreement centered on a 60-day ceasefire extension. As part of the potential deal, the Strait of Hormuz would reopen, Iran would clear mines it deployed in the waterway and allow free shipping passage, and the United States would respond by lifting its current blockade on Iranian ports.

However, US officials said nothing is ready to be signed, with combatants remaining at odds over Iran’s enriched uranium stockpile and tolls on the strategic waterway. President Donald Trump indicated he would not rush into an agreement, keeping a lid on market optimism. Traders are closely monitoring further diplomatic signals, as any breakdown in talks could quickly reverse the currency movement.