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NZD falls as safe haven demand lifts the US dollar
The kiwi traded near 0.5750 after a three-day slide, while the USD strengthened on heightened Middle East tensions and reports of new strikes by US forces.
The New Zealand dollar slid for a third consecutive session against the US dollar, trading around 0.5750 in Asian hours Monday as safe-haven demand supported the greenback.
FXStreet attributed the NZD weakness to a combination of a subdued kiwi and a sharp rise in the US dollar amid heightened geopolitical tensions in the Middle East. The outlet cited reporting that US Central Command launched additional strikes on Sunday aimed at weakening Iran’s capability to target civilian vessels, and that US forces hit more than 300 Iranian targets over a three-night span.
Despite a positive turnaround in New Zealand data, the pair stayed under pressure. BusinessNZ said its Performance of Services Index rose to 50.6 in June from an upwardly revised 48.0 in May, the first return to expansionary territory for the services sector since January, while the composite index jumped to 53.6 from 49.9.
FXStreet also noted that the NZD is influenced by broader risk sentiment as well as New Zealand’s economic outlook and central bank policy. It pointed to the reserve bank’s medium-term inflation target range of 1% to 3%, alongside factors such as China-linked growth expectations and dairy export prices that can drive kiwi moves.