NZD Gains Despite Hawkish Fed Tone, Middle East Tensions
The New Zealand Dollar (NZD) has gained despite the Federal Reserve's hawkish tone and Middle East tensions.
The NZD/USD pair halted its three-day losing streak, trading around $0.5660 during European hours on Monday. However, it faces potential downside pressure as the US Dollar gains strength from hawkish comments made by Fed officials.
Cleveland Fed President Beth Hammack cautioned against allowing prices to normalize, while Philadelphia Fed President Anna Paulson suggested further rate increases might be warranted. The CME FedWatch Tool now indicates a greater than 70% probability of a rate hike at the October Federal Reserve meeting, up from 57.6% last week and 17.7% a month ago.
The geopolitical risks persist as traders closely monitor US-Iran negotiations and Strait of Hormuz developments.