NZD Retreats as Weak Retail Sales and Iran Risks Weigh

The New Zealand Dollar retreated on Monday to around 0.5960, down 0.25% from its previous day's close, due to weaker-than-expected domestic consumption data and ongoing geopolitical tensions surrounding Iran.

New Zealand Retail Sales contracted by 0.5% in the second quarter, marking the first decline in nearly two years and a shift away from the 0.1% increase seen in the previous quarter. This unexpected downturn weighed on the Kiwi, as weaker domestic demand could lead to a less hawkish monetary policy stance from the Reserve Bank of New Zealand (RBNZ).

The US Treasury Department is expected to broaden its scope of secondary sanctions targeting countries and entities maintaining business ties with Iran. The new measures are set to allow the US to make activities in certain Iranian sectors subject to secondary sanctions, threatening affected companies with exclusion from the USD-based financial system.