FX.co ★ New Zealand Dollar Holds at 2-Month Low

The New Zealand dollar traded near $0.579 on Monday, its weakest level in two months, as intensifying tensions in the Middle East weighed on risk sentiment. Iran launched missile strikes against Israel on Sunday, following Israeli airstrikes on the southern suburbs of Beirut in response to alleged Hezbollah attacks. This exchange marked a sharp escalation in regional hostilities and heightened concerns that the conflict could undermine ongoing diplomatic efforts. Downside pressure on the kiwi was partially offset, however, by expectations of tighter monetary policy from the Reserve Bank of New Zealand. Markets continue to price in the possibility of a rate hike as early as July, with the Official Cash Rate expected to peak at around 3.50% late next year.