The Australian dollar fell to around $0.72 but stayed near its highest since April 2022 as investors turned cautious amid uncertainty in US-Iran peace talks, while the upcoming government budget reinforced efforts to contain inflation. Australia’s government is set to unveil its annual budget on Tuesday, with expectations of a narrower deficit of around A$25 billion, or 0.8% of GDP. The budget is expected to emphasize spending restraint and include changes to investment tax settings that have long been criticized for favoring wealthy property investors. Analysts said a tighter fiscal stance could help ease inflationary pressures and reduce the need for further rate hikes later this year. Swaps currently imply an 18% chance that the Reserve Bank will raise rates to 4.6% in June, but a move in August is about 82% priced in. Meanwhile, the US and Iran continue to struggle toward a diplomatic resolution, while the Strait of Hormuz remains effectively closed, keeping energy prices elevated.