The Australian dollar climbed above $0.707, reaching a three-week high as global risk appetite improved and the US dollar weakened after US President Trump announced a two-week suspension of military operations against Iran. The move came just ahead of a deadline that would have triggered intensified strikes, with Trump instead declaring a “double-sided ceasefire” tied to Iran’s agreement to reopen the Strait of Hormuz. He added that the US had received a 10-point proposal from Iran that could form the basis for negotiations, with the two-week period intended to finalize a broader settlement. The ceasefire has the potential to reshape the inflation outlook, possibly reducing pressure on the RBA to further tighten policy. Markets had been pricing in a rate increase toward 4.35% or higher at the May meeting, partly in response to elevated energy prices following the Strait’s closure. Nonetheless, analysts cautioned that supply conditions could take months to fully normalize, even if a lasting agreement is secured.