The New Zealand dollar weakened to around $0.595 on Monday, hitting its lowest level since late May, as risk sentiment took a hit following the US attack on Iran, raising fears of further escalation in the Middle East. The US launched airstrikes on three Iranian nuclear sites early Sunday, marking its direct entry into Israel’s war with Iran.
President Trump claimed Iran’s key nuclear facilities were “totally obliterated” and warned of “far greater” attacks unless Iran pursued peace.
On the domestic front, data last week showed that New Zealand’s GDP grew more than expected in Q1, marking the second consecutive quarter of expansion after two quarters of contraction.
This was in line with market expectations that only one more rate cut may be left in the current easing cycle, fully priced in by November.
Investors now await key indicators this week, including trade balance and consumer confidence, for further insight into the economy.