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New Zealand dollar slides as US dollar firms ahead of FOMC minutes
NZD/USD fell back toward the mid-0.5800s, while investors weighed Fed policy signals and oil-driven inflation jitters that kept US yields elevated.
The New Zealand dollar eased versus the US dollar, with NZD/USD extending a pullback from around 0.5925 and drifting lower for a second straight day on Wednesday. Spot prices slipped back toward the mid-0.5800s and hit a fresh weekly low during the Asian session.
FXStreet attributes the move to a firmer US dollar as markets focus on upcoming Federal Open Market Committee minutes. The outlet also links support for the greenback to rising inflation concerns, with oil prices climbing toward a nearly three-week high amid the Middle East crisis, helping keep US Treasury bond yields elevated.
The report says geopolitical risk remains a factor for the USD, noting President Donald Trump’s comments that the US is not in talks with Iran and that a naval blockade of Iranian ports is in effect. It adds that Tehran has kept the Strait of Hormuz closed, pressuring shipping conditions and sustaining a risk premium.
On the New Zealand side, FXStreet points to a hawkish tilt from the Reserve Bank of New Zealand as a potential cushion for the Kiwi. It cites Brown Brothers Harriman’s Elias Haddad, who argues that above-target inflation and a more favorable domestic growth outlook support additional RBNZ rate hikes, with swaps pricing implying 75 basis points of tightening over the next 12 months to 3.25%.