AUD/USD rallies beyond 0.7100 amid hopes of new US-Iran peace talks

• AUD/USD rallies 1.8% in two days and hits fresh four-week highs at 0.7120.
• Speculation about new US-Iran talks has boosted sentiment and hammered the safe-haven USD.
• Later on Tuesday, the US PPI is expected to confirm that inflation accelerated in March.

The Australian Dollar (AUD) appreciated for the second consecutive day against the US Dollar (USD) on Tuesday, reaching four-week highs above 0.7120 at the time of writing and drawing closer to the 2026 high at 0.7187.

News from Iran keeps driving markets on Tuesday, with reports hinting at a new round of negotiations between the US and Iran fuelling a relief rally. The risk-sensitive Aussie has rallied about 1.8% so far this week, as the safe-haven US Dollar tumbles across the board.

US President Donald Trump assured on Monday that Iran had called asking to “work on a deal,” and reports from different sources hinting at ongoing contacts between Iran and US have boosted speculation about a new round of negotiations. Reuters boosted those hopes further on Tuesday, affirming that delegations from the US and Iran would be ready to return to Pakistan to resume peace talks.

Australian consumer confidence plunges in April

In the macroeconomic front, Australian Westpac Consumer Confidence deteriorated to its lowest level in six years in April, to -12.5, from 1.2 in March. The impact on the Aussie, however, was minimal as investors await Thursday’s employment data for a broader picture of the economic impact of Iran’s war.

In the US, the March Producer Price Index (PPI) figures, due later on Tuesday, are likely to provide some diversion from the geopolitical scenario. Producer inflation is expected to show a similar trend as Friday’s consumer price figures, providing further reasons for Federal Reserve (Fed) hawks to call for higher interest rates.