Australian Dollar Gains Traction as Trump Extends Iran Ceasefire, Australian Pmis Rebound into Expansion

• AUD/USD gains ground to around 0.7155 in Thursday’s early Asian session. 
• Trump said there is “no time frame” for the conflict with Iran.
• Australian preliminary PMIs climbed back into expansion in April. 

The AUD/USD pair gains momentum near 0.7155 during the early Asian session on Thursday. US President Donald Trump’s extension of a ceasefire with Iran revives risk appetites, supporting the Australian Dollar (AUD) against the US Dollar (USD). The preliminary reading of the S&P Global Purchasing Managers Index (PMI) is due later on Thursday. 

US President Donald Trump said on Tuesday that the US is extending the ceasefire with Iran at Pakistan’s request as he waits for a unified proposal from Iran. This development eases fears of a renewed conflict that had pushed energy prices sharply higher.

However, tensions remain high as Tehran keeps a tight grip on the Strait of Hormuz, controlling passage through the trade route and firing on ships. The speaker of the Iranian parliament and top negotiator, Mohammad Bagher Ghalibaf, said that reopening the Strait of Hormuz would be “impossible” while the US and Israel committed “flagrant” breaches of the ceasefire, including the US naval blockade. 

Signs of a prolonged war in the Middle East could boost a safe-haven currency such as the Greenback and create a headwind for the pair. 

Data released by S&P Global on Thursday showed that the preliminary reading of Australia's S&P Global Manufacturing Purchasing Managers Index (PMI) climbed to 51.0 in April, compared to 49.8 in March. Meanwhile, Australia’s S&P Global Services PMI rose to 50.3 in April from the previous reading of 46.3, while the Composite PMI rose to 50.1 in April versus 46.6 prior.