Forex News

• AUD/USD declined as risk aversion rose after failed US–Iran talks, with no deal reached after 21 hours.
• President Trump said the US would begin blockading all ships entering or leaving the Strait of Hormuz.
• Parliament Speaker Ghalibaf said that despite constructive initiatives, the US failed to gain Iran’s trust.

AUD/USD recovers slightly after a gap-down open but remains in negative territory, trading around 0.7010 during the Asian hours on Monday. The pair weakened as risk aversion rises after US Vice President JD Vance said Washington and Tehran failed to reach a peace agreement in Islamabad following 21 hours of talks.

US Vice-President Vance noted negotiations had yet to produce a mutually acceptable deal, emphasizing the need for firm assurances that Iran will not pursue nuclear weapons. Meanwhile, US President Donald Trump said the US would begin “blockading” all ships entering or leaving the Strait of Hormuz.

On Iran’s side, Parliament Speaker Mohammad Bagher Ghalibaf said despite “constructive initiatives,” the US failed to gain the Iranian delegation’s trust, leaving the decision with Washington.

Rising energy costs have also fueled inflation concerns, with Australia’s monthly inflation gauge hitting a record 1.3% in March, signaling renewed price pressures since late 2025. The Reserve Bank of Australia (RBA) has already raised rates by 50 basis points to 4.10%, and markets now expect another hike in May.

As of April 10, the ASX 30 Day Interbank Cash Rate Futures May 2026 contract traded at 95.765, indicating a 64% probability of a rate hike to 4.35% at the next RBA meeting.

Here’s all you need to know about the developments in the Middle East war that took place over the weekend, which are expected to have a significant impact on the markets in the upcoming week.

• United States (US) Vice President JD Vance stated on Sunday that the US and Iran have failed to reach an agreement on the peace terms in Islamabad after the negotiations went on for 21 hours.
• "We negotiated for several hours, and we have not yet reached an agreement that is satisfactory for both sides. We need to see an affirmative commitment that they will not seek nuclear weapons and tools which will enable them to achieve nuclear weapons. The President is very clear about this," added Vance.
• Iran’s Parliament Speaker Mohammad Bagher Ghalibaf, who led Iran in the negotiations, said although he and his colleagues had offered “constructive initiatives”, the US had been “unable to gain the trust of the Iranian delegation in this round of negotiations”.
• It was now up to Washington “to decide whether it can gain our trust or not”, Ghalibaf added.
• US President Donald Trump in his post on Truth Social that the US is going to start “BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz”.  
• The US Navy is going to start “ destroying the mines the Iranians laid in the straits”, warning that any Iranian who fires at the US or at “peaceful vessels will be blown to hell. No one who pays an illegal toll will have safe passage on the high seas,” he said, adding that the blockade – which will involve so far unspecified other countries – will “begin shortly. Iran will not be allowed to profit off this Illegal Act of EXTORTION. They want money and, more importantly, they want Nuclear,” Trump warned.
• In a Fox News interview later on Sunday, Trump reiterated his threat, noting that “I could take out Iran in one day. I could have their entire energy everything, every one of their plants, their electric generating plants, which is a big deal.”
• In response to Trump’s new threats, Qalibaf said: “If you fight, we will fight, and if you come forward with logic, we will deal with logic. We will not bow to any threats, let them test our will once again so that we can teach them a bigger lesson.
• Iran’s Revolutionary Guard (IRGC) warned in its latest statement that “approaching military vessels to the strait of Hormuz is considered a violation of the ceasefire and will be dealt with harshly and decisively”.

ING’s Chief Economist for Greater China, Lynn Song, notes that China’s CPI inflation eased to 1.0% year-on-year after Lunar New Year, while PPI turned positive for the first time since 2022. The report highlights rising energy and transportation fuel costs, suggesting further upside for inflation and a gradual shift away from entrenched deflationary expectations in China.

Energy-driven price pressures support reflation

"The substantive price drops are in line with China's typical seasonality around the Lunar New Year holiday. More importantly for the months ahead, we are starting to see the impact of higher energy prices in the data. The subcategory for transportation fuel costs surged 10.0% MoM in March, even as gasoline prices have risen much less than crude oil prices in China. This surge culminated in a YoY spike to 3.4%, after coming in at -9.7% YoY in the first two months of the year. Further upside looks likely as energy prices stay elevated."

"Producer price index inflation bounced back solidly into positive territory in March, ending a 41-month streak of deflation. PPI inflation rose to 0.5% YoY in March, slightly higher than market expectations and slightly lower than our forecast."

"As we've discussed in recent months' updates, the other key categories driving PPI recovery are non-ferrous metals mining (36.4%) and smelting and processing (22.4%), which continued to see PPI move higher on the month. Higher producer prices should eventually translate to reflationary momentum across the economy, which could help in the efforts to crack down on involution-type price competition."

"China has been locked in deflationary expectations for the past several years, with CPI inflation ending the last 3 years at 0.2% YoY or lower."

"All these factors could be at risk for reversal this year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

DBS Group Research expects Malaysia’s 1Q26 advance Gross Domestic Product (GDP) to grow 5.5% year-on-year, slightly below 6.3% in 4Q25 but still robust. Growth is seen supported by export-oriented electrical and electronics manufacturing, global AI tailwinds, construction and domestic demand. Headline inflation is projected to rise modestly to 1.7% in March, with oil-driven pressures cushioned by fiscal subsidies.

AI tailwinds and mild price pressures

"Malaysia’s incoming data are likely to reflect resilient economic growth and contained inflation in 1Q26, despite the Middle East shock since February 27."

"We expect robust advance GDP growth estimate of 5.5% yoy in 1Q26, albeit lower than 6.3% yoy in 4Q25."

"Growth was likely supported by continued strength in export-oriented electrical & electronics manufacturing, bolstered by global AI tailwinds, as well as supportive domestic demand driven by ongoing construction and investment momentum, while services expanded robustly amid these spillovers, alongside sustained household spending."

"We anticipate headline inflation to rise but remain contained at 1.7% yoy in March, from 1.4% yoy in February."

"This reflected some upside pressures from food prices due to festive-related spending, and energy prices following the spike in global oil prices stemming from the Iran war, although the overall impact is mitigated by fiscal subsidies."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

TD Securities expects China’s March exports to normalize after a strong Jan–Feb report, while imports could surprise on the upside as authorities stockpile key goods and commodities during the US–Iran conflict. Rising input costs may slow production and weigh on exports. The bank projects Q1 GDP at 4.8% y/y, supported by strong exports and manufacturing earlier in the quarter.

Stockpiling and costs shape China outlook

"After the phenomenal trade report in Jan-Feb, we expect some normalization in Mar for exports."

"Imports, however, could surprise to the upside as China may rush to stockpile key goods and commodities amid the ongoing US-Iran conflict."

"As input costs rise, we may see a slowdown in production which may be a drag on China’s exports growth in the near term."

"Industrial production is likely to hold steady in Mar but rising input costs could change the calculus for firms’ output plans soon."

"Retail sales may underwhelm as consumers brought forward their spending last month due to the CNY holidays and the early rollout of the consumer trade in prog subsidies.GDP should rise to 4.8% y/y in Q1 given strong exports and mfg over the qtr."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

ING’s Min Joo Kang notes that KRW is trading below 1,500, with near-term moves heavily dependent on Middle East developments. The team keeps its 1,450–1,550 trading range, expecting KRW to strengthen rapidly if the war ends. They argue recent KRW weakness stems mainly from foreign equity profit-taking, with attractive Korean equity valuations helping to stabilise the currency.

War risk and equities drive Won outlook

"KRW now trades below 1,500 level. The near-term move will depend heavily on the Middle East situation. Thus, we continue to keep our trading range of 1,450-1,550 for now."

"We agree with Governor Rhee’s view: if the war ends, then the KRW is expected to strengthen quite rapidly. The recent weak KRW was mostly driven by foreign investors’ net selling of equities – presumably profit taking rather than panic selling."

"The still appealing valuation levels in the Korean equity market are expected to help stabilise KRW."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

DBS Group Research expects Singapore’s non-oil domestic exports to rise for a seventh consecutive month in March 2026, accelerating to 10.3% year-on-year from 4.0% in February. Electronics exports are seen outperforming on global AI demand, while non-electronics may rebound as Lunar New Year base effects fade, though petrochemicals likely face pressure from a Middle East-related naphtha supply crunch.

NODX growth led by electronics

"We expect Singapore’s non-oil domestic exports (NODX) to sustain growth for a seventh consecutive month in March 2026, expanding by a faster pace of 10.3% yoy, compared with 4.0% yoy in February."

"The performance was likely supported by superior growth of electronics domestic exports relative to weaker non-electronics shipments, as electronics continued to be bolstered by global AI tailwinds."

"While non-electronics domestic exports may have rebounded as adverse base effects from the previous month’s Lunar New Year faded, segments such as petrochemicals were likely under pressure due to a naphtha feedstock supply crunch stemming from the Middle East conflict."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Risk mood improves as DXY hits four-week lows near 98.52.
• Weekend US-Iran talks seen as catalyst for AUD/USD above 0.7100.
• Upside capped below 0.7100; support seen at 0.7026, 0.6978.

The Australian Dollar (AUD) is poised to end Friday’s session flat against the US Dollar (USD), even though an improvement in market mood drove the Greenback toward four-week lows near 98.52, according to the US Dollar Index (DXY). Hopes that the US-Iran talks over the weekend could open the door for further discussions to lay a deal may push AUD/USD higher, past 0.7100, clearing key resistance at Thursday's high of 0.7094. At the time of writing, the pair trades around 0.7070.

AUD/USD Price Forecast: Technical Outlook

On its way north, AUD/USD cleared April’s 1 high past 0.6962, but fell shy of cracking the 20-day Simple Moving Average (SMA). Finally, on Tuesday, buyers reclaimed 0.6978 —the 20-day SMA—and crushed 0.7000 as the pair was on its way toward weekly highs reached the next day.

Despite this, buyers ran out of steam and failed to overcome the 0.7100 figure, which is seen as the next key resistance level, before traders aim towards the March 11 year-to-date (YTD) high at 0.7187. On further strength, 0.7200 is up next.

On the downside, AUD/USD must drop below the 50-day SMA at 0.7026, so traders can remain hopeful of challenging 0.7000. On further weakness, the next stop would be the 20-day SMA at 0.6978, followed by the April 6 swing low of 0.6875.

AUD/USD Price Chart – Daily

Mary Daly, President of the Federal Reserve (Fed) Bank of San Francisco, told Reuters in an interview on Friday that if Iran conflict is resolved quickly and Oil prices come back down, a rate cut may not be out of the question.

Key takeaways:

If Iran conflict resolves quickly and oil prices come back down, a rate cut is 'not out of the question'.

If inflation stays elevated for longer than anticipated, we would hold steady until we know we are getting the inflation job done.

We had work to do on inflation before the oil price shock; now, the work just takes longer.

I put a lower probability on a rate hike than on a cut or holding steady.

Persistently high oil prices would mean higher inflation but would also hurt growth.

We're already seeing higher prices show through to the economy with people pulling back on travel because they are worried about higher costs.

Extremely important to bring inflation to 2%, but doing that at the expense of jobs puts families behind the eight ball.

US economic fundamentals 'solid,' labor market in a steadier place.

Risks to fed's goals of full employment, inflation are balanced.

Need to see what happens with the conflict and how businesses are passing along price increases.

Seeing surcharges, which can be reversed, rather than price increases.

Policy is restrictive enough to put downward pressure on inflation, balanced enough to support a steady labor market.

Policy in a good place gives us more time to see how conflict resolves and what happens to oil prices.

High CPI reading will not be a surprise to anyone.

The real question is does the ceasefire persist, and if it does the CPI will be old news.”