FX.co ★ New Zealand Dollar Heads for Weekly Drop

The New Zealand dollar retreated to around $0.585 and is headed for a weekly decline of more than 2%, as investors remained cautious amid the absence of clear progress in US–Iran negotiations. This week’s renewed surge in tensions, together with conflicting statements from both parties, underscores ongoing uncertainty over the prospects for a diplomatic breakthrough. The situation has been further complicated by Iran-backed Hezbollah’s rejection of a US-brokered ceasefire proposal, hampering efforts to de-escalate regional conflicts.

Still, downside pressure on the NZD has been partly offset by expectations of tighter monetary policy from the Reserve Bank of New Zealand. Markets continue to price in a rate hike in July, with the Official Cash Rate now projected to peak at around 3.50% toward the end of next year.