Aussie, kiwi lead gains on ceasefire news
The Australian and New Zealand dollars were the strongest performers on Wednesday morning as markets reacted to news that US President Donald Trump had agreed to a two‑week ceasefire with Iran.
The deal, brokered by Pakistan, follows a ten‑point plan from Iran. President Trump said the ceasefire is dependent on the Strait of Hormuz reopening.
Oil prices plunged on the news, with WTI crude down 13%. US stock market futures jumped around 2.0%.
AUD/USD surged 1.1%, lifting the Aussie to its highest level in two weeks.
NZD/USD jumped 1.2%, also hitting a two‑week high.
The New Zealand dollar will be in focus later in the session, with the Reserve Bank of New Zealand decision due at 2.00pm NZST (12.00pm AEST).
IMF warns on oil shock
The IMF has warned that the escalating conflict involving Iran risks slowing global growth and pushing prices higher worldwide.
IMF chief Kristalina Georgieva told Reuters that, without the fighting, the Fund would likely have nudged its 2026 global growth forecast up to around 3.3%. Instead, she said, “all roads lead to higher prices and slower growth.”
Even if the conflict does end quickly and economic activity rebounds, the IMF now expects to downgrade its growth outlook and lift its inflation forecast. A longer and broader conflict would deal a heavier blow to the global economy. Some countries have already approached the IMF for financial support, and the Fund may expand existing aid programmes.
In APAC currencies, oil concerns were quickly reversed as ceasefire news dominated markets.
USD/SGD fell 0.3%, with the pair dropping to its lowest level in two weeks.
USD/CNH slipped 0.2% as it hovered near three‑year lows.
Australian growth slows as costs climb
Australia’s services sector slipped into contraction in March for the first time in more than two years. The S&P Global services PMI fell sharply to 46.3 from 52.8, its weakest reading since November 2023.
Business activity and new orders both declined, while export disruptions linked to Middle East tensions weighed on demand.
Rising fuel prices pushed cost pressures to their highest level in more than three years, prompting faster price increases for customers. Employment continued to grow for a fifteenth straight month, but business confidence fell to a 28‑month low.
The broader picture also weakened. The composite PMI dropped to 46.6, while manufacturing growth slowed, with output barely holding above the line between expansion and contraction.
Together, the data underline the risk of weak growth alongside persistent price pressures and reinforce expectations that the Reserve Bank of Australia will keep policy tight for longer.
Greenback drops sharply on Iran deal
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Calendar: 6 – 11 April
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