Weaker US jobs data and Middle East tensions lift the USD, offsetting Fed rate cut bets and pressuring the New Zealand Dollar.
The NZD/USD pair remains near 0.5895, little changed as the US Dollar regains ground amid rising geopolitical risks. Friday’s Nonfarm Payrolls report showed a surprise loss of 23K US jobs in July, with June’s figure revised down sharply to just 20K from 57K initially reported.
The data initially weakened the USD by reducing expectations for Federal Reserve rate hikes. However, escalating tensions in the Middle East, including attacks on Saudi energy infrastructure and uncertainty over the Strait of Hormuz, have revived demand for safe-haven assets. Higher oil prices are also stoking inflation concerns, potentially delaying Fed policy easing.
US Treasury yields remain elevated, supporting the USD. Meanwhile, broader risk aversion continues to weigh on the New Zealand Dollar, limiting gains in the currency pair.