New Zealand’s food price inflation eases to 2.5% annually in June, yet geopolitical tensions and oil pressures support the NZD.
NZD/USD climbed to 0.5840 in Asian trading Friday, recovering from prior losses. The pair strengthened despite softer food inflation, which rose 0.6% month-over-month in June, down from May’s 1.0% gain. Annual food inflation slowed to 2.5%, the lowest since February 2025.
The Reserve Bank of New Zealand has signaled potential rate hikes due to persistent inflation risks, particularly from elevated oil prices. Geopolitical tensions in the Middle East, including threats to Red Sea oil routes, further bolstered the currency’s resilience.
Markets remain cautious as escalating conflicts raise supply disruption concerns, offsetting the impact of cooling domestic inflation data.