The New Zealand dollar climbed to around $0.580 on Monday, extending the previous session’s rebound as risk appetite improved amid a pause in military exchanges between the US and Iran. Iran announced on Sunday that it had halted retaliatory strikes against US allies in the Middle East after Washington stopped further attacks on the country on Friday, easing concerns in global markets following the recent flare-up in tensions.
The pause in hostilities also drove oil prices lower, offering additional support to the kiwi, as New Zealand’s substantial dependence on imported energy makes its currency particularly sensitive to movements in fuel costs.
On the monetary policy front, the Reserve Bank of New Zealand is widely expected to deliver another 25-basis-point rate hike in September after stronger-than-expected inflation data last week. Market pricing suggests the policy rate will reach at least 3.0% by the end of the year and peak at around 3.5% by mid-2027.
