NZD/USD rises above 0.6000 as US Dollar remains subdued due to dampened safe-haven demand

• NZD/USD appreciated as New Zealand’s trade surplus came in at NZD1,235 million, better than expected for May.

• The US Dollar struggled due to improved risk appetite following easing tensions in the Middle East.

• Fed Chair Powell advocated for delaying rate cuts, likely until sometime in the fourth quarter.

NZD/USD extends its winning streak for the third successive session, trading around 0.6030 during the early European hours on Wednesday. The pair remains stronger following the trade balance data, released by Statistics New Zealand.

New Zealand’s trade surplus came in at NZD1,235 million in May month-over-month in May, surpassing the market expectations of NZD1,060 million but lower than the previous NZD1,285 million (revised from NZD1,426 million). Exports rose to NZD7.7 billion, while Imports rose to NZD6.4 billion.

The NZD/USD pair receives support as the US Dollar (USD) faces challenges amid improving risk appetite, driven by easing tensions in the Middle East. US President Donald Trump announced that a ceasefire between Iran and Israel had taken effect, raising hopes for an end to the 12-day conflict.

However, caution lingered amid uncertainty over the ceasefire’s durability. A US intelligence report indicated that US strikes on Iranian nuclear sites have set back Tehran's program by only a matter of months, per Reuters. Additionally, Iranian Foreign Minister Abbas Araghchi said that the country's nuclear program continues, per the local news agency Al Arabiya.

Fed Chair Powell stated during his testimony before the congressional budget committee on Tuesday that rate cuts could be delayed until sometime in the fourth quarter. Powell added, “When the time is right, expect rate cuts to continue.” He also said that data suggests that at least some of the tariffs will hit consumers and will start to see more tariff inflation starting in June.