AUD/USD experiences a notable increase of 1.8% over the past two days, reaching new four-week highs at 0.7120. Speculation regarding renewed discussions between the US and Iran has enhanced market sentiment while negatively impacting the safe-haven USD. Later on Tuesday, the US PPI is anticipated to validate that inflation increased in March. The Australian Dollar appreciated for the second consecutive day against the US Dollar on Tuesday, reaching four-week highs above 0.7120 at the time of writing and drawing closer to the 2026 high at 0.7187.
Market movements on Tuesday are heavily influenced by developments in Iran, as reports suggest a potential new round of negotiations between the US and Iran, contributing to a relief rally. The risk-sensitive Australian dollar has appreciated approximately 1.8% this week, as the safe-haven US Dollar declines broadly. On Monday, US President Donald Trump confirmed that Iran had reached out to discuss a potential agreement, while various reports suggest that communications between Iran and the US are taking place, fueling speculation regarding a new phase of negotiations.
Source enhanced those expectations further on Tuesday, confirming that delegations from the US and Iran would be prepared to return to Pakistan to continue peace discussions. In the macroeconomic landscape, Australian Westpac Consumer Confidence has declined to its lowest point in six years in April, registering at -12.5, down from 1.2 in March. The effect on the Australian dollar, however, was negligible as market participants anticipate Thursday’s employment figures for a more comprehensive understanding of the economic ramifications stemming from the conflict in Iran.
The upcoming March Producer Price Index figures in the US, set to be released later on Tuesday, are expected to offer some distraction from the current geopolitical landscape. Producer inflation is anticipated to reflect a trend akin to Friday’s consumer price data, offering additional justification for Federal Reserve hawks advocating for increased interest rates.