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New Zealand dollar slips as Middle East tensions lift oil and risk aversion
NZD/USD was near 0.5840 as traders looked ahead to Friday’s June food inflation data and as safe-haven demand rose amid US strikes around Iran and higher oil prices.
The New Zealand dollar edged lower after two days of gains, with NZD/USD trading around 0.5840 during Asian hours on Thursday. FXStreet said the move reflects a cautious tone ahead of Friday’s June food inflation data, which follows a sharp acceleration in May figures.
FXStreet linked the hesitancy to growing inflation concerns tied to escalating conflict in the Middle East and climbing oil prices. The outlet also cited Reserve Bank of New Zealand Chief Economist Paul Conway, who warned that sticky inflation, worsened by recent Middle East supply shocks, could lead to additional rate hikes.
Investor sentiment was further pressured by reports that China’s economy grew at its slowest pace in three and a half years, according to FXStreet, and China is New Zealand’s top trading partner. In currency markets, the Kiwi also faced selling as safe-haven demand increased following aggressive US military actions tied to Iran.
FXStreet said the geopolitical situation intensified after the US launched multiple waves of strikes against Iranian coastal military assets and reinstated a naval blockade of Iran, with CENTCOM confirming missiles hit an oil tanker’s smokestack in the Strait of Hormuz. The outlet added that the heightened unpredictability helped keep global markets on edge.