The US Dollar (USD) experienced broad weakness against major currencies, influenced by renewed optimism over potential US-Iran diplomatic negotiations and uncertainty regarding the Federal Reserve's (Fed) future interest rate moves [1][2]. The AUD/USD pair retreated slightly from a nearly four-week high near 0.7100 during the Asian session on Tuesday, with the move lacking a clear catalyst but supported by a positive risk tone and the Reserve Bank of Australia's (RBA) hawkish stance [1]. Technical analysis indicated that AUD/USD maintained a bullish bias above key moving averages and Fibonacci retracement levels, with immediate resistance at 0.7111 and support at 0.7052, 0.7010, and 0.6994 [1].
Meanwhile, USD/CHF extended its losing streak for the seventh consecutive day, trading around 0.7830, as reports of possible further US-Iran talks weighed on the USD [2]. US President Donald Trump stated that Iran had made contact and was seeking to resume negotiations, while Vice President JD Vance described recent discussions as constructive, providing US officials with deeper insight into Iran’s negotiating stance [2]. The Swiss Franc (CHF) gained additional support from easing oil prices, which increased pressure on the Swiss National Bank (SNB) to adjust policy, although the SNB reiterated its readiness to intervene to curb excessive CHF appreciation [2].
On the macroeconomic front, Swiss annual consumer inflation rose to 0.3% in March from 0.1% in February, marking the highest level in a year and reflecting the impact of recent energy cost increases linked to the Middle East conflict [2]. Fed Governor Stephen Miran commented that the Iran-related energy shock has not yet affected long-term inflation expectations and expects price pressures to return to the central bank’s target within a year [2]. US Treasury Secretary Scott Bessent advised a 'wait and see' approach before cutting interest rates, expressing confidence that recent price increases would not become embedded in inflation expectations [2].
According to a weekly performance table, the US Dollar was the strongest against the Japanese Yen but declined by 1.36% against the Australian Dollar and 0.95% against the Swiss Franc [1].
CONCLUSION
The US Dollar's weakness, driven by hopes for US-Iran diplomacy and shifting Fed expectations, has led to gains for both the Australian Dollar and Swiss Franc. Market sentiment remains cautious, with technical and policy signals suggesting limited downside for the USD in the near term. Forward-looking statements from US officials indicate a patient approach to monetary policy adjustments.