The pair rises as de-escalation in the Middle East boosts risk sentiment, though RBNZ rate hike expectations remain muted for June.
NZD/USD trades near 0.5940 in Asian hours, recovering from prior losses as geopolitical risks ease. The New Zealand Dollar gains support after US forces intercepted Iranian attacks and reaffirmed a ceasefire, reducing market uncertainty.
Markets price in no RBNZ rate hike for June but fully expect a July increase amid persistent inflation concerns, particularly from higher energy costs. The central bank noted financial system resilience but warned of potential employment pressures if economic recovery slows.
The US Dollar’s strength, driven by recent military actions, may cap further NZD/USD gains despite improved risk appetite.