The Australian Dollar strengthened against the US Dollar, rising above the 0.7000 level amid improved market sentiment linked to potential progress on an Iran nuclear agreement. According to FX Street, the AUD/USD pair traded around 0.7035 on Tuesday, marking a 0.50% gain for the day.
US Treasury Secretary Scott Bessent indicated that an agreement with Iran to reopen the strategically vital Strait of Hormuz could be reached as soon as Tuesday or Wednesday. This development has boosted risk appetite, supporting commodity-linked currencies like the Australian Dollar.
For Japanese investors, the move highlights the sensitivity of FX markets to geopolitical developments, particularly in energy supply routes that can influence global trade and commodity prices relevant to Japan's import-driven economy.