The New Zealand dollar (NZD) continued to decline against the US dollar (USD) on Tuesday, slipping about 0.33% to around 0.5855 during Asian trading hours. This follows a brief rebound the day before. The Kiwi is experiencing selling pressure, especially as the US dollar gains some ground, even after President Trump hinted at a potential deal with Iran.
As of now, the US Dollar Index (DXY), which measures the USD against six major currencies, was up by 0.15%, standing at approximately 99.10.
On Monday evening, Trump announced that he had postponed a planned military action against Iran due to “very positive developments” in negotiations, indicating a “very high chance” of reaching an agreement, according to reports.
This shift in stance followed requests from leaders in Saudi Arabia, Qatar, the UAE, and others. The US dollar’s recovery comes after a significant drop recently, largely influenced by persistently high oil prices. These rising oil prices continue to elevate global inflation expectations, which might lead traders to anticipate a rate cut from the Federal Reserve later this year.
Market watchers are eagerly awaiting the upcoming release of the April minutes from the Federal Open Market Committee (FOMC) on Wednesday, which could provide more insights into the Fed’s policy direction.
Meanwhile, in New Zealand, the producer price index (PPI) for the first quarter surged by 1.4%, surpassing the anticipated 0.8%. This follows a contraction of 0.5% in the last quarter of 2025. Such rising producer-level inflation may heighten expectations for interest rate hikes by the Reserve Bank of New Zealand (RBNZ).
