The Australian dollar traded below $0.695, holding steady at a seven-week low as investors remained skeptical of a near-term Iran war de-escalation, while the RBA flagged rising inflation risks from global oil shock. The central bank warned that a prolonged conflict-driven supply shock could lift both inflation and long-term expectations, potentially requiring a more restrictive policy stance. Assistant Governor Chris Kent noted that such shocks tend to push prices higher while weighing on growth, limiting the ability of policy to fully offset the impact and instead shifting the focus toward preventing inflation from becoming entrenched. Meanwhile, uncertainty around the conflict continued to cloud sentiment, with conflicting signals from the US and Iran over potential negotiations. While Washington indicated efforts to advance talks and ease tensions, Tehran pushed back against ceasefire proposals, and increased US troop deployments in the region added to fears of further escalation.