New Zealand softens to near 0.5700 despite US-Iran peace progress
The NZD/USD pair trades in negative territory for the fifth consecutive day around 0.5705 during the Asian trading hours on Tuesday. The US Dollar (USD) strengthens against the New Zealand Dollar (NZD) on a hawkish tone from the US Federal Reserve (Fed). Traders brace for the preliminary readings of the US S&P Global Purchasing Managers Index (PMI) later on Tuesday.
Traders grapple with rising expectations that the Fed may take more aggressive action to tackle inflation later this year under the leadership of new Chair Kevin Warsh. This, in turn, could provide some support to the Greenback and create a headwind for the pair.
Fed funds futures are pricing nearly an 89% probability of a Fed hike in December, compared with 15.2% chance a week ago, according to the CME Group's FedWatch tool.
On the other hand, the progress of the US-Iran peace deal could boost the riskier assets such as the Kiwi against the USD. Vice President JD Vance said on Monday that negotiations between Washington and Tehran had made “very good progress" but acknowledged there had been “threatening and whining.” This came after Iran said it would close the Strait of Hormuz again because of Israeli strikes on Lebanon.
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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