Key Moments
- NZD/USD drew renewed selling interest during the Asian session on Friday but continued to trade above the 0.5800 level.
- Uncertainty around a potential US-Iran peace agreement and firm expectations of further Fed tightening supported the US Dollar.
- The RBNZ’s hawkish shift, including projections for additional rate hikes this year, helped cushion downside in the New Zealand Dollar.
NZD/USD Holds Key Support After Fresh Wave of Selling
The NZD/USD pair came under renewed pressure during the Asian trading hours on Friday, trimming part of the strong rebound seen the previous day from a more than two-month low. Despite the latest bout of selling, the pair continued to trade above the 0.5800 handle and stayed locked within the trading band that has contained price action since the start of the week.
US-Iran Headlines and Fed Expectations Lift the Dollar
Risk sentiment had received a notable boost after US President Donald Trump stated on Thursday that a deal had been reached with Iran and that a final document could be signed soon, potentially as early as the weekend. Iran, however, responded that no final decision on an agreement had been made, dampening some of the earlier optimism.
This renewed uncertainty, combined with expectations for a more hawkish Federal Reserve, supported demand for the safe-haven US Dollar and weighed on NZD/USD. Recent readings on the US Consumer Price Index (CPI) and Producer Price Index (PPI) released this week indicated a renewed pickup in inflation, reinforcing market expectations that the Fed will raise interest rates by the end of this year. That outlook has provided an additional underpinning for the Greenback against the backdrop of ongoing geopolitical risks.
Hawkish RBNZ Outlook Offers a Backstop for the Kiwi
On the New Zealand side, the Reserve Bank of New Zealand’s abrupt shift to a more hawkish stance has offered some support to the New Zealand Dollar and helped curb deeper losses in NZD/USD. The central bank’s projections point clearly to a 25 basis points rate increase at the upcoming July 8 meeting. The RBNZ also indicated that the Official Cash Rate could rise to around 2.85% by year-end, implying as many as three rate hikes over the period.
Given this backdrop, market participants may be reluctant to adopt aggressive bearish positions on NZD/USD without evidence of sustained selling pressure. This is particularly relevant as the pair has recently pulled back from just below the 0.6000 psychological barrier, which also aligns with the May monthly swing high. Traders are now turning attention to the University of Michigan’s US Consumer Sentiment Index for fresh direction cues.
US Dollar Performance Against Major Currencies
The table below shows the percentage change of the US Dollar (USD) against major currencies today, with the US Dollar strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.12% | 0.18% | 0.09% | 0.24% | 0.37% | 0.16% | |
| EUR | -0.13% | -0.02% | 0.04% | -0.04% | 0.11% | 0.23% | 0.03% | |
| GBP | -0.12% | 0.02% | 0.09% | -0.02% | 0.10% | 0.25% | 0.06% | |
| JPY | -0.18% | -0.04% | -0.09% | -0.10% | 0.04% | 0.18% | -0.03% | |
| CAD | -0.09% | 0.04% | 0.02% | 0.10% | 0.14% | 0.27% | 0.07% | |
| AUD | -0.24% | -0.11% | -0.10% | -0.04% | -0.14% | 0.12% | -0.08% | |
| NZD | -0.37% | -0.23% | -0.25% | -0.18% | -0.27% | -0.12% | -0.19% | |
| CHF | -0.16% | -0.03% | -0.06% | 0.03% | -0.07% | 0.08% | 0.19% |
The heat map reflects percentage changes among the major currencies, with the base currency shown on the left and the quote currency across the top. For instance, selecting the US Dollar from the left column and moving horizontally to the Japanese Yen cell provides the percentage move in USD (base)/JPY (quote).
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