The New Zealand dollar edged up to around $0.602 on Wednesday but remained vulnerable amid escalating tensions in the Middle East. The ongoing conflict between Israel and Iran, now in its sixth day, has heightened global risk aversion, leading investors to seek safe-haven assets and leaving risk-sensitive currencies like the kiwi on the defensive. Meanwhile, investors now await the US Federal Reserve policy announcement later today.
While rates are widely expected to remain unchanged, markets are closely watching for any signals of potential cuts following a string of weak US economic data. Domestically, attention turns to New Zealand’s first-quarter GDP report, due on Thursday, with analysts expecting the economy to expand by 0.7% quarter-on-quarter, while contract by 0.8% on an annual basis. On the monetary policy front, the Reserve Bank of New Zealand has already signaled it is nearing the end of its aggressive easing campaign, with markets pricing in one final rate cut in August.
