The Australian and New Zealand dollars strengthened on Monday, reversing recent losses as optimism over a potential diplomatic resolution to the Middle East conflict reduced fears of an oil supply shock.
The Aussie rose 0.2% to $0.7001, building on a 0.3% gain from Friday, leaving the currency little changed for the week.
The Kiwi dollar also posted gains, benefiting from the same risk-off sentiment easing in energy markets.
The move reflects a broader shift in market positioning as traders weigh the likelihood of a ceasefire against ongoing geopolitical tensions.
With oil prices stabilizing, the immediate pressure on commodity-exporting currencies has eased.
The Australian dollar, which had retreated on Friday amid a broad-based rally in the US dollar, found support as the focus shifted from immediate supply disruption to diplomatic progress.