NZD Dives to Weekly Low Amid Stronger US Dollar Ahead of FOMC Minutes
The New Zealand Dollar (NZD) has declined to its weekly low against the US Dollar (USD), as the greenback remains firm ahead of the release of FOMC Minutes. The NZD/USD pair dropped back closer to mid-0.5800s during the Asian session, reaching a fresh weekly low. This comes amidst a stronger USD, which is supported by rising oil prices due to the Middle East crisis and inflationary jitters.
President Donald Trump's recent statements have sharpened the US-Iran standoff, keeping geopolitical risk premiums in play and supporting the USD. Meanwhile, global supply disruption fears have lifted crude oil prices to a nearly three-week top, reviving inflation fears and maintaining bets for at least one Fed rate hike in 2026.
However, some analysts argue that the Reserve Bank of New Zealand's (RBNZ) hawkish tilt could support the NZD and limit losses for the currency pair. Brown Brothers Harriman's Elias Haddad notes that above-target inflation, a more favorable domestic growth outlook, and a policy rate near the lower-end of the RBNZ's neutral range argue for additional RBNZ rate hikes.