NZD

• NZD/USD weakens as a complex Middle East situation sparks risk aversion.
• Trump claimed Iran agreed to nuclear inspections, but Iran countered that real negotiations have not yet started.
• Markets widely expect the RBNZ to hike its Official Cash Rate by 25 basis points to 2.5% in July.

NZD/USD continues its losing streak for the sixth consecutive day, trading around 0.5660 during the Asian hours on Wednesday. The pair weakens as the US Dollar (USD) gains ground in a highly complex geopolitical landscape.

Traders are carefully navigating conflicting signals regarding a potential United States (US)-Iran diplomatic breakthrough. While US President Donald Trump stated that Iran had “fully and completely” agreed to open its facilities to nuclear inspections, Iranian Foreign Minister Abbas Araghchi quickly tempered expectations by clarifying that substantive nuclear negotiations have not actually begun.

Additionally, Iran’s chief negotiator issued a stern warning that the strategic Strait of Hormuz will never return to its pre-war status and will remain firmly under Iranian oversight. Meanwhile, diplomatic efforts showed signs of progress elsewhere as Washington hosted a fresh round of talks between Israel and Lebanon, aimed at securing a ceasefire with Iran-backed Hezbollah.

The US Dollar also received support from strong macroeconomic indicators that reinforced the narrative of “US exceptionalism.” June’s flash estimate for the US S&P Global Composite Purchasing Managers’ Index (PMI) climbed to 52.2, comfortably beating May’s reading of 51.5 and signaling healthy business expansion.

The US manufacturing sector showed remarkable resilience, with output jumping to 55.7 from the previous month’s 55.1, easily outperforming forecasts of 54.8. Simultaneously, the Services PMI printed at 51.3, ticking up from May’s 50.7 and clearing the consensus estimate of 51.0, proving that demand in the broader service economy remains incredibly sticky.

On the other side of the ledger, the Reserve Bank of New Zealand (RBNZ) is widely expected to raise its Official Cash Rate (OCR) by 25 basis points to 2.5% in July. These hawkish RBNZ expectations are strongly backed by accelerated inflationary pressures within the domestic economy. This policy outlook gained further traction after first-quarter Consumer Price Index (CPI) data remained steady at a stubborn 3.1%, keeping the pressure on New Zealand policymakers to act.

The New Zealand dollar fell to around $0.572, the lowest in eleven weeks, weighed down by a firm US dollar. The greenback strengthens amid increased bets on a US rate hike following the Federal Reserve’s hawkish signals. Meanwhile, US–Iran talks in Switzerland have made encouraging progress, with technical-level discussions set to continue this week, easing earlier concerns after President Donald Trump again warned of strikes on Iran over its support for Hezbollah. New Zealand’s GDP data released last week suggested that economic recovery was gaining momentum. However, the figures largely reflected conditions prior to the escalation in Middle East conflict. As a result, forecasts show GDP to barely grow or even contract in the second quarter. Markets continue to price in a 25-bps hike in July given the RBNZ’s hawkish outlook, though swap pricing imply only two increases this year rather than the three previously expected.

• NZD/USD gains ground to near 0.5790 in Thursday’s Asian session.
• New Zealand’s Q1 annual GDP beat the estimates. 
• Fed held interest rates steady and signaled growing support for rate hikes this year.

The NZD/USD pair gains traction to around 0.5790 during the Asian trading hours on Thursday. The New Zealand Dollar (NZD) strengthens against the US Dollar (USD) amid upbeat annual New Zealand Gross Domestic Product (GDP) data and improved risk sentiment. 

Data released by Statistics New Zealand on Thursday showed that the country’s GDP expanded by 0.8% QoQ in the first quarter (Q1) of 2026. This figure followed a 0.5% expansion (revised from 0.2%) in the fourth quarter of 2025 and came in weaker than the expectation of a rise of 0.9%.

On an annual basis, the New Zealand economy grew by 1.5% in Q1 of 2026, compared to a rise of 1.5% (revised from 1.3%) in Q4 of 2025, while beating the estimation of a 1.1% growth.

US President Donald Trump and Iran’s President Masoud Pezeshkian have electronically signed a memorandum of understanding to end the US and Israel’s war on Iran, per Reuters. Both sides said the deal is in effect. Iran and the US are expected to formally sign the MOU to end the war on Friday in Geneva.

The US Federal Reserve (Fed) on Wednesday decided to leave the policy rate in 3.50%-3.75% range at its June policy meeting. The federal funds rate has held there since the US central bank lowered rates by three-quarters of a percentage point in the latter part of 2025. Fed officials signaled the chance of higher rates as they assess the impacts of the Iran war on inflation.

“Persistently high prices are a burden for the American people, but the recent past need not be prologue,” said Kevin Warsh in his debut press conference as chairman. Officials are unambiguous and unanimous. This committee will deliver price stability.”

• NZD/USD weakens as broad caution and a steady US Dollar kept investors defensive ahead of updates on Iran’s nuclear program.
• Fed is widely expected to keep interest rates unchanged at 3.50% to 3.75% in June.
• China’s Retail Sales fell 0.6% year-on-year in May, missing expectations of a flat reading.

NZD/USD extends its losses for the third consecutive day, trading around 0.5810 during the Asian hours on Tuesday. The pair depreciates as the US Dollar (USD) holds steady amid broad market caution. Investors remain on the defensive as they await further updates regarding Iran’s unresolved nuclear program.

Both Washington and Tehran have not released the official text of the agreement; major shipping lines are delaying vessel rerouting through the strategic waterway until full transparency is established.

Even though US President Donald Trump announced that a memorandum of understanding (MoU) has been signed to end the conflict and reopen the blockaded Strait of Hormuz, market participants remain deeply cautious. According to Iran’s semi-official Mehr news agency, the current draft calls for the strait to reopen within 30 days under Iranian arrangements.

The Federal Reserve (Fed) is widely expected to keep its benchmark interest rate unchanged at a target range of 3.50% to 3.75% on Wednesday, which could be attributed to the higher US inflation due to elevated energy prices linked to Middle East tensions. Traders will be closely monitoring the press conference for cues on how new Fed Chair Kevin Warsh intends to lead the central bank into its next era.

The New Zealand Dollar (NZD) struggles following a wave of weak economic data out of China. Because China is New Zealand’s largest trading partner, buying roughly one-third of all Kiwi goods exports, the New Zealand Dollar acts as a primary liquid proxy for the Chinese economy.

China’s domestic demand slumped sharply in May, with Retail Sales contracting by 0.6% year-on-year against expectations of a flat reading. Additionally, Fixed Asset Investment dropped at a faster pace of -4.1%, failing to meet the projected -2%. While Industrial Production offered a minor bright spot by coming in stronger-than-expected at 4.5%.

• NZD/USD holds strong despite New Zealand’s services sector contracting for a fourth straight month as May’s PSI dropped to 47.5.
• The US Dollar declines as a US-Iran peace deal eases geopolitical tensions, lowering global inflation and interest rate concerns.
• Iran stated final talks depend on US compliance, demanding an immediate and complete end to the maritime blockade.

NZD/USD gains ground after registering minor losses in the previous day, trading around 0.5850 during the Asian hours on Monday. The pair remains stronger as the New Zealand Dollar (NZD) holds ground following the release of domestic economic data.

New Zealand’s services sector continues to struggle, as the BusinessNZ Performance of Services Index (PSI) fell to 47.5 in May, down from a revised 48.7 in April. This marks the fourth consecutive month of contraction for the sector.

Concurrently, the broader economy is showing signs of a deeper slowdown. The Performance of Composite Index dropped from a revised 49.2 to 48.4, signaling its third straight month of contraction and its steepest decline since June 2025.

The NZD/USD pair appreciates as the US Dollar (USD) declines after the United States (US) and Iran had reached a deal to end their conflict, easing concerns about inflation and higher interest rates.

Washington and Tehran said on Sunday that they have reached an agreement that will take effect on Friday. US President Donald Trump stated that the US is lifting its naval blockade on Iranian ports and that the Strait of Hormuz will reopen after the agreement is signed.

The United Kingdom (UK), France, Germany ‌and Italy said that the countries were prepared to lift sanctions on Iran in response to steps on its nuclear program after the US and Iran reached a deal to end their war.

Iran’s National Security Council confirmed a ceasefire agreement with the US, adding that final deal talks will start after the other party fulfills commitments under the memorandum of understanding. Iranian officials said the maritime blockade against Iran should end immediately and entirely.