Investors shift to defensive assets after US strikes on Iran raise concerns over energy supply disruptions and geopolitical risks.
NZD/USD dropped 0.19% to 0.5830 on Friday as escalating US-Iran tensions drove investors toward safe-haven assets. The US conducted a sixth day of strikes against Iranian infrastructure, prompting warnings of retaliation from Iran’s Revolutionary Guard Corps (IRGC).
Risk-sensitive currencies like the NZD faced pressure, while the USD strengthened amid the risk-off sentiment. Concerns over potential disruptions to global energy supplies added to market unease, with Iranian officials threatening to block the Strait of Hormuz and other key shipping routes.
The Reserve Bank of New Zealand’s recent 25 basis point rate hike to 2.5% provided limited support, as policymakers signaled further tightening may be needed to combat persistent inflation.