NZD/USD remains steady near 0.6050 following Food Price Index data

• NZD/USD holds ground after the release of food inflation data in New Zealand.

• New Zealand’s Food Price Index rose 4.4% YoY in May, from April’s 3.7% increase, marking highest level since December 2023.

• The NZD received support from improved risk sentiment after Iran reportedly asked for an immediate ceasefire.

NZD/USD extends its gains for the second successive session, trading around 0.6060 during the Asian hours on Tuesday. However, the pair moved little after the Food Price Index data was released by Statistics New Zealand.

The annual food inflation in New Zealand climbed to 4.4% in May, from April’s 3.7% rise. The inflation has reached its highest level since December 2023, which further pressures household budgets. Meanwhile, the monthly food prices rose to 0.5%, from a 0.8% increase in April. The persistent food inflation could influence the Reserve Bank of New Zealand’s (RBNZ) policy outlook.

The risk-sensitive New Zealand Dollar (NZD) gained ground as investors scaled back risk-off positions due to the possibility diminution of the Israel-Iran conflict. The shift in sentiment emerged after Iran reportedly asked many countries, including Oman, Qatar, and Saudi Arabia, to urge US President Donald Trump to use his influence on Israel for an immediate ceasefire, per Reuters.

Traders are closely watching for updates from the United States (US) following the recent posts from President Donald Trump. On Monday, Trump called for the evacuation of Tehran, hours after urging the country's leaders to accept a deal to limit its nuclear program, as Israel hinted that attacks would continue, per Bloomberg.

Trump posted in a social media post, “Iran should have signed the ‘deal’ I told them to sign.” “What a shame, and a waste of human life. Simply stated, IRAN CAN NOT HAVE A NUCLEAR WEAPON. I said it over and over again! Everyone should immediately evacuate Tehran.”