FX.co ★ New Zealand Dollar Trims Gains

The New Zealand dollar dipped to approximately $0.605 on Tuesday, reversing the significant gains from the previous session. This shift comes as investors adopt risk-off strategies due to rising tensions in the Middle East. The conflict between Israel and Iran has intensified, now entering its fifth day, with both nations engaging in a fresh wave of attacks. Tehran has called on several countries to exert pressure on the United States for an immediate ceasefire, although Israel has shown little interest in such negotiations. Domestically, new figures indicate that New Zealand's annual food inflation surged to 4.4% in May, up from 3.7% in April, marking the highest level since December 2023. In light of this, financial markets anticipate just one more interest rate cut from the Reserve Bank, which is fully expected by November, signifying the conclusion of the current easing cycle. Investors are now keenly observing key local economic indicators set for release this week, including data on the current account, consumer confidence, and Q1 GDP, for additional economic insights.