New Zealand Dollar rebounds to near 0.5800 amid easing risk aversion
NZD/USD gains ground after registering over 1% losses in the previous day, trading around 0.5810 during the Asian hours on Monday. The pair appreciates as the US Dollar (USD) edges lower on easing risk aversion after US President Donald Trump criticized Israel's strikes on Beirut. Trump stated he would urge Prime Minister Benjamin Netanyahu to avoid retaliatory action against Iran, while simultaneously calling on Tehran to resume diplomatic negotiations.
The geopolitical friction deepened on Sunday when Israel launched renewed strikes on Lebanon despite their current truce, eroding broader hopes for an end to the regional war and delaying the anticipated restart of crude flows through the critical Strait of Hormuz.
Iran, in response, launched multiple rounds of missiles toward Israel, warning against further military action in Lebanon and threatening a fragile ceasefire amidst stalled peace negotiations. Although Israel's military reported that all incoming missiles were successfully intercepted with no casualties, the escalation severely rattled energy markets.
However, the Greenback may regain its ground as Friday’s data showed that the US economy posted a third straight month of strong job gains in May. US Nonfarm Payrolls (NFP) increased by 172,000 jobs in May, compared to 179,000 (revised from 115,000) in the previous reading, and the Unemployment Rate held at 4.3% during the same period.
The New Zealand Dollar (NZD) receives support as traders price in the prospects of higher interest rates from the Reserve Bank of New Zealand. Markets continue to price in a July rate hike, with the Official Cash Rate (OCR) seen peaking around 3.50% late next year. Traders will likely observe China's inflation and trade balance figures, as well as New Zealand business PMI data later this week.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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