NZD/USD Slumps Toward 0.5930 as Safe-Haven USD Strengthens on Middle East Tensions

NZD/USD Dips Below 0.5950 on Risk Aversion and Hawkish Fed

NZD/USD opens the week on a softer tone, dropping toward 0.5930, a fresh monthly low, as a combination of geopolitical tension, safe-haven flows, and dovish RBNZ expectations continues to weigh on the Kiwi.

Geopolitical Tensions Intensify: US Bombs Iran Nuclear Sites

The pressure on the risk-sensitive New Zealand Dollar (NZD) comes after the United States joined Israel in bombing three key Iranian nuclear sites on Sunday. As global markets brace for a possible Iranian counter-response, the demand for safe-haven assets such as the US Dollar (USD) has surged.

The rising Middle East conflict risk has soured investor appetite for higher-yielding currencies, pushing NZD/USD away from last week’s high near the 0.6100 handle.

Fed’s Hawkish Tone Supports USD While RBNZ Leans Dovish

The Federal Reserve (Fed) has also helped the Greenback by keeping a hawkish stance, maintaining projections for only two rate cuts in 2025 while lowering easing expectations for 2026 and 2027.

In contrast, the Reserve Bank of New Zealand (RBNZ) may resume rate cuts amid slowing inflation, weaker global demand, and tariff-induced headwinds, making the NZD less attractive compared to the USD.

Outlook Hinges on Iran's Response and RBNZ Signals

Market participants will closely monitor Iran’s next move and forward guidance from the RBNZ. Any signals of broader conflict escalation or further dovish shifts by the Kiwi central bank could push NZD/USD further below 0.5900, with next support seen around 0.5870.

Internal Linking Suggestions (for Tredu.com):

• Live NZD/USD Chart and Technical Forecast
• How Geopolitical Events Affect Forex Volatility
• RBNZ Policy Tracker and Rate Cut Projections