Geopolitical risks drive demand for the US Dollar, pushing NZD/USD lower despite New Zealand’s economic rebound in June.
The New Zealand Dollar weakened against the US Dollar, with NZD/USD trading near 0.5750 in Asian hours on Monday. The decline follows three consecutive days of losses as safe-haven demand boosts the USD amid escalating Middle East tensions.
New Zealand’s services sector returned to expansion in June, with the BusinessNZ Performance of Services Index rising to 50.6 from 48.0 in May. The broader private sector also showed recovery, with the composite index jumping to 53.6, its highest level since December 2025. However, currency markets largely ignored the data.
The USD strengthened after US forces conducted additional strikes in the Middle East, targeting Iranian-backed assets. Reports indicate over 300 Iranian targets were hit in three nights, further elevating geopolitical risks and supporting the greenback.