The recent rebound of the Australian dollar and the euro has indeed been quite strong, mainly because the news of the resumption of US-Iran negotiations has boosted market risk appetite. I noticed that last week, the AUD/USD once surged to 0.7148, hitting a new high in over a month, and the EUR/USD also hovered around 1.18, even touching 1.1811 yesterday.

From a fundamental perspective, since the announcement of the US-Iran talks, crude oil prices have plummeted, directly reducing the safe-haven appeal of the US dollar. Both high oil prices and risk aversion sentiment, which support the dollar, are weakening, so the AUD and EUR have been rising steadily.

Regarding the Australian dollar, strategists at Westpac Bank believe that as the Middle East situation eases, the AUD could rise to 0.75 in the second half of this year, supported by yield advantages and strong economic fundamentals. Plus, with Australia's inflation still high, the market expects a 68% chance that the Reserve Bank of Australia will raise interest rates for the third time in May, which will also support the AUD.

The situation with the euro is a bit more complex. Societe Generale is more optimistic, believing that if the Iran conflict de-escalates and the Strait of Hormuz reopens, the EUR/USD could further rise toward 1.20. They expect the European Central Bank to raise interest rates in June and September, while the Federal Reserve will hold steady. But ING Group's view is much more conservative, believing that the short-term gains of the euro may be limited, and unless there is substantial progress in US-Iran negotiations, it will be difficult to sustain a break above 1.18.

One detail worth noting is that the market's expectations for the ECB's rate hikes seem a bit too aggressive. If the ECB does not raise rates in April, it could be negative for the euro, which is why many are asking if the euro will keep falling.

But there is a risk point here. Lee Hardman, a foreign exchange strategist at MUFG, warns that the market currently seems overly optimistic, believing the worst is over. However, he thinks it may still be premature to say that the dollar's safe-haven appeal has disappeared. The risk of energy price shocks might be underestimated, and such shocks could have a significant impact on the global economy.

Overall, the rebound of the AUD and EUR makes sense logically, but the euro's future performance will depend on the progress of US-Iran negotiations and the ECB's policy moves. There may still be volatility in the short term.