FX.co ★ Australian Dollar Gains Ground

The Australian dollar climbed above $0.71 on Monday, hitting a one-week high as global risk sentiment improved amid signs the US and Iran are moving closer to a deal. The proposed agreement would reopen the Strait of Hormuz, end current hostilities, unfreeze a portion of Iran’s assets, and lay the groundwork for further negotiations aimed at curbing Tehran’s nuclear program.

However, President Trump stated that Washington would maintain its blockade of the Strait of Hormuz until an agreement is formally concluded and emphasized he would not “rush” into a deal.

Domestically, expectations for further monetary tightening by the Reserve Bank of Australia eased after a surprise rise in unemployment. The jobless rate increased to 4.5% in April from 4.3% in March, its highest level in roughly four and a half years. Following the data, the implied probability of a rate hike at the next policy meeting fell to 3%, from 13% previously, according to financial market pricing compiled by Westpac.