NZD/USD edges slightly higher on Tuesday and trades around 0.5965 at the time of writing, up 0.08% on the day.
The pair withstands a firmer US Dollar (USD), which benefits from increased safe-haven demand as geopolitical tensions between the United States (US) and Iran remain at the center of market attention
The US is stepping up economic pressure on Iran and its international trading partners. US Treasury Secretary Scott Bessent has outlined a strategy aimed at further isolating Tehran from the global economy, including sanctions targeting countries and entities that continue to trade with Iran. US President Donald Trump has also warned that foreign entities have a limited period to end their commercial ties with Tehran or face US financial sanctions.
However, the campaign is keeping markets uncertain, with investors questioning whether it will help bring the conflict closer to a resolution or instead prolong hostilities and delay the reopening of the Strait of Hormuz. The resulting safe-haven demand supports the US Dollar and limits the advance in NZD/USD. However, the Greenback also faces headwinds after the US Treasury’s decision to expand its buyback operations for longer-dated bonds.