Geopolitical easing and a US-Iran framework agreement drive USD lower, lifting the New Zealand Dollar ahead of the Fed decision.
NZD/USD rose 0.17% to 0.5840 on Monday, supported by broad USD weakness following a US-Iran framework agreement to end hostilities. The deal, expected to be formalized in Switzerland on Friday, includes reopening the Strait of Hormuz and extending a ceasefire since April.
The US Dollar Index (DXY) fell toward 99.50 as risk sentiment improved, while WTI crude oil dropped nearly 5% on expectations of normalized energy flows. Domestically, New Zealand’s services sector contracted for a fourth straight month, with the BusinessNZ Performance Index slipping to 47.5 in May.
Markets now await the Federal Reserve’s upcoming decision, with the NZD resilient despite weak economic data.