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NZD/USD slips as US-Iran tensions lift demand for the US dollar
NZD/USD was last around 0.5880, down 0.4% on the day, as investors balance safe-haven USD demand against softer expectations for Fed tightening.
FXStreet reports the New Zealand dollar edged lower against the US dollar on Tuesday, with NZD/USD retreating to around 0.5880 and falling 0.4% on the day.
The move was driven by rising geopolitical risk between the United States and Iran, including remarks from US President Donald Trump that he is not interested in renewing an expiring Iran agreement and that the US could place the strategic waterway under US control.
Risk aversion tended to support the greenback via safe-haven flows, while the dollar’s gains were tempered by fading expectations of Federal Reserve tightening. According to the CME FedWatch tool, markets priced a 35.0% chance of a rate hike at the Fed’s next meeting, down from 47.0% a month earlier.
Looking ahead, investors are set to watch the FOMC Minutes due on Wednesday for clues on US policy. In New Zealand, the Kiwi also drew support from expectations the Reserve Bank of New Zealand could raise its policy rate by 25 basis points next month, which some signals suggest could limit further downside in NZD/USD.