The New Zealand dollar slipped to $0.584 on Tuesday, erasing the previous session’s gains, as renewed US strikes on Iran undermined hopes for a peace deal. US forces reportedly targeted missile launch sites and mine‑laying boats in southern Iran near the Strait of Hormuz, actions a military spokesperson characterized as self‑defense.
At the same time, investors are focusing on Wednesday’s policy decision from the Reserve Bank of New Zealand, with the official cash rate widely expected to be left on hold. However, the central bank is seen cutting its economic growth forecasts while lifting projections for inflation and interest rates, reflecting the impact of surging global energy and fuel prices. Market pricing also signals a more hawkish stance, implying roughly an 80% chance of a rate hike in July and fully pricing in an increase by September.
