26.03.202600:32:55UTC+00Aussie Dollar Holds at 7-Week Low

The Australian dollar slipped below $0.695, hovering near a seven-week low, as investors remained doubtful about any imminent de-escalation in the Iran conflict and the Reserve Bank of Australia warned of mounting inflation risks from a global oil shock. The central bank cautioned that a prolonged, conflict-driven supply disruption could push inflation and long-term inflation expectations higher, potentially forcing a more restrictive policy stance.

Assistant Governor Chris Kent noted that such shocks typically raise prices while dampening economic growth, limiting the scope for monetary policy to fully cushion the blow and instead shifting the priority to preventing inflation from becoming entrenched.

At the same time, uncertainty surrounding the conflict continued to weigh on market sentiment, with mixed messages from the US and Iran over the prospects for negotiations. Washington signaled efforts to advance talks and reduce tensions, while Tehran resisted ceasefire proposals. Additional US troop deployments in the region further stoked concerns over a possible escalation.