Iran denies talks, triggering a risk-off wave; Australia's PMI unexpectedly plunges, and the Australian dollar is heavily sold off.

汇通财经APP讯——Tuesday (March 24) during the Asian session, the Australian dollar has been weak, with most against major currencies trending lower. The AUD/USD pair is sliding on a choppy decline; the pair is currently trading around 0.6970, down about 0.6% on the day. Iran’s hardline stance strongly denies peace talks with the United States, starkly contrasting with U.S. President Trump’s earlier optimistic remarks, reigniting market risk-aversion sentiment and putting pressure on the Australian dollar. A decline in risk appetite supports the U.S. dollar; the U.S. Dollar Index edges up to around 99.40, up about 0.2% on the day. As a typical risk-sensitive currency, the Australian dollar often faces heavy selling pressure when geopolitical uncertainty intensifies.

Geopolitical shock

On Monday, U.S. President Trump announced that he had instructed the Department of Defense to pause military strikes against Iran’s power facilities for five days, and said that he was having “very good and productive dialogue” with Tehran regarding the comprehensive resolution of hostile actions in the Middle East. This statement temporarily eased market tensions, driving a pullback in oil prices and a rebound in risk assets.

However, Iran quickly issued a hardline response. Iran’s parliament spokesperson, Mohammad Bagher Qalibaf, clearly stated: “We have not held any talks with the United States,” and accused Trump of spreading false information to manipulate financial and oil markets.

Iranian official media also denied any direct or indirect dialogue, emphasizing that the war will continue until it receives full damages compensation. This stance reversal caused risk-aversion sentiment to return rapidly, supporting the dollar and weighing on the Australian dollar.

Australian economic data

In addition to geopolitical factors, domestic Australian economic data also adds further drag to the Australian dollar. S&P Global’s initial March Purchasing Managers’ Index (PMI) shows the composite PMI fell sharply to 47.0, down significantly from 52.4 in February, marking the first contraction in 18 months. The services activity index dropped further to 46.6, while the manufacturing PMI edged down slightly to 50.1.

A composite PMI below 50 indicates an overall contraction in business activity, mainly driven by a sharp drop in services output. Slower growth in new orders, weaker employment growth, and heightened concerns about supply-chain disruptions have increased market doubts about Australia’s economic growth outlook.

Investors will focus on the Australian February Consumer Price Index (CPI) data to be released on Wednesday. However, because the data does not fully reflect the recent surge in energy prices caused by the Iran conflict, its actual impact on expectations for monetary policy from the Reserve Bank of Australia (RBA) is expected to be limited.

Outlook and risks

In the short term, the Australian dollar faces dual pressure: ongoing geopolitical risk and weak domestic Australian economic data. Key support for AUD/USD is located around 0.6900; further downside could test the 0.6800 psychological level. Resistance above is focused on the 0.7050–0.7100 area.

Over the medium to long term, the direction of the Australian dollar still depends on how the situation in the Middle East evolves, global economic growth prospects, and commodity price performance. If tensions in the Iran conflict ease, a rebound in risk sentiment would be beneficial for the Australian dollar; otherwise, prolonged uncertainty will continue to weigh on the Australian dollar through energy prices and safe-haven demand. Traders need to closely monitor U.S. economic data and RBA policy signals and do a good job in risk management.

(AUD/USD daily chart, source: YiHuiTong)

Editor’s summary

News that Iran denied peace talks with the United States reversed market expectations, reigniting risk-aversion sentiment. At the same time, Australia’s March initial PMI unexpectedly contracted, further weakening the Australian dollar’s performance. As AUD/USD falls, near-term downward pressure is evident; but any positive development in the Middle East situation could bring a chance for a rebound.

Overall, the current market highlights the significant impact of geopolitical events on risk-sensitive currencies, as well as Australia’s vulnerability in the face of external shocks.

At 11:52 Beijing time, AUD/USD is trading at 0.6965/66.

大量资讯、精准解读，尽在新浪财经APP

责任编辑：郭建