Forex News: NZ Dollar Falls Amid U.S.-Iran Risks; RBNZ Rate

NZ Dollar Falls Amid U.S.-Iran Risks; RBNZ Rate Decision In Focus

(RTTNews) - The New Zealand dollar weakened against other major currencies in the Asian session on Tuesday, amid renewed uncertainty about a potential peace deal to end the Middle East conflict after the US attacked key Iranian missile launch sites in Southern Iran and boats attempting to lay mines, in what Iran said were defensive actions.

Traders choose to wait for the Reserve Bank of New Zealand or RBNZ decision on Wednesday. For the third consecutive meeting, it is generally anticipated that the RBNZ would maintain the Official Cash Rate (OCR) at 2.25%. However, traders are projecting a rate increase of 25 basis points (bps) at the July 8 meeting and a tightening of 125 bps over the following year.

In the meantime, attention will be drawn to the accompanying policy statement and the press conference following the meeting, where remarks made by RBNZ Governor Anna Breman will propel the further Zealand Dollar (NZD) and provide the NZD/USD pair a further boost.

Meanwhile, U.S President Donald Trump said talks were progressing well but warned that additional attacks could follow if negotiations broke down. The current talks are on extending the ceasefire for about two months, during which Washington would lift its blockade and Tehran would reopen the Strait of Hormuz, which will ease pressure on major Asian economies.

Crude oil prices slumped to hit two-week lows on Monday amid expectations that a potential U.S.-Iran peace deal could restore smoother energy flows through the key shipping route. West Texas Intermediate crude for July delivery was down 5.2 percent at $91.56 per barrel.

In the Asian trading today, the NZ dollar fell to a 4-day low of 0.5845 against the U.S. dollar, from yesterday's closing value of 0.5861. The kiwi may test support near the 0.57 region.

Against the euro, the yen and the Australian dollar, the kiwi advanced to 1.9895, 92.95 and 1.2250 from Monday's closing quotes of 1.9853, 93.17 and 1.2230, respectively. If the kiwi extends its downtrend, it is likely to find support around 2.00 against the euro, 91.00 against the yen and 1.23 against the aussie.

Meanwhile, the U.S. dollar strengthened against its major peers in the Asian session today, as the US-Iran conflict caused a little increase in reviving concerns about inflation and raising hopes for a more aggressive US Federal Reserve (Fed).

In the Asian trading today, the U.S. dollar rose to 4-day highs of 1.1627 against the euro, 159.18 against the yen and 0.7853 against the Swiss franc, from Monday's closing quotes of 1.1636, 158.96 and 0.7833, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.15 against the euro, 160.00 against the yen and 0.79 against the franc.

Against the pound, the greenback edged up to 1.3465 from yesterday's closing value of 1.3495. The greenback may test resistance around the 1.33 region.

Looking ahead, Canada manufacturing sales for April, U.S. S&P/Case-Shiller home price index for March, U.S. Consumer Board's consumer confidence for May and U.S. Dallas Fed manufacturing index for May are slated for release in the New York session.

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