Kiwi Bounces as US-Iran Tensions Ease
The New Zealand dollar continued its upward trend on Monday, reaching around $0.580 as risk sentiment improved following a pause in military strikes between the US and Iran.
Iran announced it had halted retaliatory attacks against US allies in the Middle East after Washington suspended further strikes against the country since Friday, providing relief to global markets.
The lull in fighting pushed oil prices lower, which benefited the kiwi as New Zealand's heavy reliance on imported energy makes it sensitive to fluctuations in fuel costs.
Market expectations are that the Reserve Bank of New Zealand will deliver another 25-bp hike in September following hot inflation data last week. Markets imply rates to reach at least 3.0% by year-end and peak at 3.5% around mid-2027.