The New Zealand dollar fell to around $0.605 on Tuesday, trimming sharp gains from the previous session, as investors moved to risk-off positions amid escalating Middle East tensions.
Israel and Iran have begun a new round of attacks as their conflict enters its fourth day.
Tehran has reportedly urged several countries to pressure the US for an immediate ceasefire, but Israel signaled no interest. On the domestic front, fresh data showed New Zealand’s annual food inflation accelerated to 4.4% in May from 3.7% in April, the highest since December 2023.
This comes as markets now price in just one more rate cut from the Reserve Bank, fully expected by November, marking the end of the easing cycle.
Investors are awaiting key local data this week—including current account, consumer confidence, and Q1 GDP—for further economic clues.