NZD Rebounds Amid Ongoing Tensions with Iran, Reserve Bank on Rate Hike
The New Zealand dollar stabilized around $0.595 on Tuesday after falling 0.4% in the previous session, weighed down by market sentiment affected by escalating tensions between the US and Iran.
Treasury Secretary Scott Bessent announced that the US is expanding secondary sanctions to five sectors of the Iranian economy, imposing new penalties on nearly 60 entities, individuals, and vessels supporting Iran's oil revenues, weapons procurement, and cyber activities.
The kiwi also faced pressure from weak domestic retail sales data, indicating softer consumer demand and raising concerns about the strength of the economic recovery, which could reduce the scope for further monetary tightening by the Reserve Bank of New Zealand.
Despite this, the Reserve Bank is widely expected to raise interest rates again in September due to elevated inflation remaining high.