Geopolitical tensions and stalled US-Iran talks drive investors toward the safe-haven USD, pressuring the risk-sensitive NZD.
NZD/USD dropped 0.28% to 0.5860 on Wednesday, extending its decline for a third straight session. The New Zealand Dollar remains under pressure as uncertainty over US-Iran negotiations fuels demand for the US Dollar, a traditional safe-haven asset.
Diplomatic progress between Washington and Tehran appears fragile, with reports indicating potential advances on the Strait of Hormuz issue. However, US demands for reparations and Iran’s stance on ceasefire discussions have kept markets cautious, weighing on risk-sensitive currencies like the NZD.
Investors are now focused on upcoming US inflation data, with July’s Consumer Price Index (CPI) expected to rise 0.1% month-over-month, while core inflation is forecast at 0.2%. Annual figures are projected to ease to 3.4% and 2.5%, respectively.