NZD/USD Slumps Amid Inflation Data and Safe-Haven Demand

The New Zealand dollar took a hit after Stats NZ reported an acceleration in inflation to 4.1% in the second quarter, its highest level in more than two years.

The Consumer Price Index rose 1.5% in the period, beating analysts' consensus forecast of 4.0%. The increase was driven primarily by higher fuel prices amid tensions in the Middle East.

This news came on the heels of the Reserve Bank of New Zealand's decision to raise the official cash rate to 2.50% on July 8th, which reinforced expectations of further monetary tightening in September.

However, escalating tensions between the US and Iran boosted demand for the US dollar as a safe-haven asset, causing the NZD/USD pair to surrender part of its recent gains during the second half of the week.