NZD/USD Sinks to Three-Day Low Amid Ongoing Middle East Tensions

The New Zealand Dollar is under pressure for a third consecutive day as Middle East tensions boost demand for the US Dollar. The NZD/USD exchange rate fell to around 0.5860 on Wednesday, down 0.28% from the previous day.

Uncertainty surrounding negotiations between the United States and Iran continues to weigh on risk-sensitive assets like the Kiwi. While reports suggest that Washington and Tehran are moving closer to an agreement regarding the Strait of Hormuz, US President Donald Trump's demands for reparations from Iran are keeping investors cautious.

The release of US inflation data later on Wednesday is also expected to influence market expectations surrounding the Federal Reserve's next policy decision. A hotter-than-expected reading could reinforce expectations of a 25-basis-point rate hike in September, providing further support to the US Dollar.