NZD/USD falls to near 0.5900 due to risk-off sentiment following US attack on Iran
NZD/USD depreciated as the US became directly involved in the Israel-Iran dispute.
The United States attacked Iran's three nuclear facilities, including Fordow, Natanz, and Isfahan.
The New Zealand Dollar remains under pressure as markets anticipate just one remaining rate cut by November.
NZD/USD continues its losing streak for the third successive session, trading around 0.5900 during the European hours on Monday. The NZD/USD pair loses ground amid dampened risk sentiment, driven by the escalating Middle East tension. Traders await the S&P Global US Purchasing Managers Index (PMI) data for June, scheduled later in the day.
On Saturday, US President Donald Trump announced that he had "obliterated" Iran's three nuclear facilities, including Fordow, Natanz, and Isfahan, in strikes overnight, in coordination with an Israeli assault. Iranian parliament approved a measure to close the strait. Iran has threatened to close the strait in the past but has never followed through on the move, per Reuters.
The NZD/USD pair depreciates as the US Dollar (USD) holds ground amid increased safe-haven demand. The US Dollar Index (DXY), which measures the value of the Greenback against six major currencies, is trading at around 99.600 at the time of writing.
On Friday, Federal Reserve (Fed) Governor Christopher Waller said that the US central bank could start cutting interest rates as soon as next month, signaling flexibility amid global economic uncertainty and rising geopolitical risks.
Last week, New Zealand’s GDP grew more than expected in the first quarter, marking the second consecutive quarter of expansion after two quarters of contraction. This supports market expectations that only one more rate cut remains in the current easing cycle, likely to be fully priced in by November. Focus will shift toward New Zealand’s economic indicators this week, including trade balance and consumer confidence data, for further insight into the country’s economic outlook.
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