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NZD/USD stalls above 0.5900 as RBNZ and geopolitical risks offset
NZD/USD is holding the 0.5900 area with resistance around 0.6000, as US-Iran tensions lifted oil and longer-dated Treasury yields while a restrictive RBNZ outlook capped downside.
FXStreet reports NZD/USD traded a little above 0.5900 on Monday, barely changed on the session and still about seventy pips below the late-August peak that capped just under 0.6000. The pair has seen four straight lower highs since that peak, and the session low has held the 0.5900 handle, with no push to reclaim 0.5950.
The newsletter said Monday’s move was driven more by global developments than New Zealand-specific news. United States forces struck Iranian rocket launchers on Larak Island on Sunday, the first acknowledged American strike on Iranian positions in a month, and Tehran responded against US bases in Jordan, lifting crude oil by more than 2% and pushing longer-dated Treasury yields higher.
FXStreet added that this created offsetting pressures for the Kiwi, because higher imported fuel costs can be inflationary and argue for Reserve Bank of New Zealand restrictiveness, while the same escalation also acts as a risk-off tax on a high-beta commodity currency. With the two forces canceling out, the pair “went nowhere,” according to the outlet.
Looking ahead, the article pointed to the RBNZ’s next decision scheduled for September 2 and said the quarter-point hike to 2.50% from July 8 left the decision itself close to fully priced, making the statement tone and rate outlook the main drivers. It also noted that market pricing shows about a 65% chance of a September 16 Fed rate increase, after Jackson Hole reset broader expectations earlier in the week.
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