Asia-Pacific FX: Risk Assets Rally on US-Iran Talk Hopes, AUD Pressured

Asia-Pacific forex markets saw mixed price action as renewed US-Iran diplomatic prospects lifted risk sentiment, with talks potentially resuming as soon as Thursday. Vice President Vance's comments drove oil prices lower and supported risk-sensitive assets across the region. US Treasury Secretary Bessent reinforced a 'wait and see' approach on interest rates, tempering expectations for near-term Federal Reserve action. China's trade data presented a mixed picture, with Q1 exports missing expectations while imports surged sharply, resulting in a significantly narrower trade surplus — a development with implications for CNY and broader Asian FX flows. The Australian dollar faces headwinds despite the improved risk backdrop, as domestic business confidence collapsed to -29 amid the Iran conflict shock hitting the economic outlook. HSBC flagged that a peace deal is essential to restore energy flows and curb inflation pressures. Traders should watch for further geopolitical developments and upcoming US rate guidance as key drivers for USD pairs and commodity-linked currencies in the near term.