NZD Falls Amid Geopolitical Tensions and Weaker Employment Data
The New Zealand Dollar (NZD) has fallen by 0.10% to around 0.5880 against the US Dollar (USD), as investors seek safe-haven assets amid fresh geopolitical tensions in the Middle East.
An Israeli airstrike in southern Lebanon has reignited risk aversion, although reports that Iran and Oman are finalizing an agreement on a temporary shipping route through the Strait of Hormuz have helped ease concerns over prolonged disruptions to energy supplies.
The US Dollar is benefiting from this defensive positioning despite mixed US economic data. Initial Jobless Claims edged up to 199K last week, but came in below market expectations of 202K. Markets continue to scale back expectations for another interest rate hike from the Federal Reserve (Fed), with the chance of a 25-basis-point rate increase in September falling to 56.9%.
The New Zealand Dollar remains weighed down by weaker-than-expected employment data, which reinforces expectations that the Reserve Bank of New Zealand (RBNZ) will continue to tighten monetary policy at a gradual pace.