Forex News: NZ Dollar Falls As US-Iran Deal Uncertainty Escalates

NZ Dollar Falls As US-Iran Deal Uncertainty Escalates

(RTTNews) - The New Zealand dollar weakened against other major currencies in the Asian session on Wednesday, as uncertainty about the situation in the Middle East and the opening of the Strait of Hormuz is keeping some traders on the sidelines. Meanwhile, optimism about the AI trade continues to generate positive sentiment.

After hectic discussions for more than a week, the U.S. and Iran were closing in to sign a Memorandum of Understanding. Iran is said to be debating and reviewing the draft MoU and is yet to send a response.

Reports suggested that the MoU would pave way for reopening of the Strait of Hormuz immediately and let both the U.S. and Iran to explore ways for resolving bilateral issues over a freshly extended 60-day ceasefire period.

Meanwhile, the Reserve Bank of New Zealand or the RBNZ's prediction suggested that the OCR might reach approximately 2.85% by the end of this year, indicating up to three rate hikes, and strongly predicts a 25-basis point (bps) rate increase at the forthcoming July 8 meeting. In the Asian trading today, the NZ dollar fell to a 6-day low of 0.5911 against the U.S. dollar, from Tuesday's closing value of 0.5921. If the kiwi extends its downtrend, it is likely to find support around 0.58 against the greenback, 92.00 against the yen and 1.99 against the euro.

Against the yen, the euro and the Australian dollar, the kiwi slid to 94.51, 1.9667 and 1.2126 from yesterday's closing quotes of 94.73, 1.9626 and 1.2114, respectively. The kiwi may test support around the 1.23 region.

Looking ahead, PMI reports from major European economies and U.K. for May and Eurozone PPI for April are due to be released in the European session.

In the New York session, U.S. MBA mortgage approvals data, U.S. ADP employment data for May, Canada labor productivity for the first quarter, U.S. and Canada S&P Global PMI reports for May, U.S. factory orders for April and U.S. weekly EIA crude oil data are slated for release.

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