After retesting a four-month low during Monday's Asian session, NZD/USD rises.
The USD is impacted by reports of a push for a truce between the US and Iran, which helps spot prices.
Before positioning for any additional recovery, care should be taken due to the ongoing geopolitical uncertainties.
The NZD/USD pair finds some buyers around the 0.5680 area, or around a four-month low that was retested on Monday during the Asian session. As of right now, it appears to have broken a two-day losing streak. Spot prices are currently trading slightly above 0.5700, up around 0.25% for the day, but there does not seem to be much room for improvement.
The United States, Iran, and regional mediators are negotiating terms for a potential 45-day truce that may put an end to hostilities, according to Bloomberg, which cited Axios. The US dollar's (USD) standing as the world's reserve currency is undermined by the headlines, which provide a brief reprieve from the precarious global risk sentiment and ultimately contribute to some support for the NZD/USD pair. However, given the ongoing geopolitical uncertainty, investors are still on edge.
If Tehran fails to reopen the Strait of Hormuz by Tuesday, US President Donald Trump has threatened to demolish Iran's civilian infrastructure, including power plants and bridges. Iran, on the other hand, presented a new requirement, stating that if a portion of the proceeds were set aside to reimburse Iran for damages caused by the conflict, passage via the vital canal may resume. Furthermore, there is still little possibility of an agreement during the next 48 hours.
Investors are nevertheless concerned that the war-related spike in energy prices could revive inflationary pressures and compel major central banks, such as the US Federal Reserve (Fed), to take a more aggressive posture. In fact, traders are now factoring in a higher likelihood that the Fed will increase borrowing prices in 2026, which might support the USD. Bullish traders should exercise cautious as this could limit the upside for the NZD/USD pair.
Due to limited liquidity following the Easter Monday holiday in many international financial markets, traders are now anticipating the release of the US ISM Services PMI for some boost later in the North American session. However, before declaring that the NZD/USD pair has made a near-term bottom and positioning for any further appreciating move, it is wise to wait for any follow-through buying given the underlying background.
The USD is impacted by reports of a push for a truce between the US and Iran, which helps spot prices.
Before positioning for any additional recovery, care should be taken due to the ongoing geopolitical uncertainties.
The NZD/USD pair finds some buyers around the 0.5680 area, or around a four-month low that was retested on Monday during the Asian session. As of right now, it appears to have broken a two-day losing streak. Spot prices are currently trading slightly above 0.5700, up around 0.25% for the day, but there does not seem to be much room for improvement.
The United States, Iran, and regional mediators are negotiating terms for a potential 45-day truce that may put an end to hostilities, according to Bloomberg, which cited Axios. The US dollar's (USD) standing as the world's reserve currency is undermined by the headlines, which provide a brief reprieve from the precarious global risk sentiment and ultimately contribute to some support for the NZD/USD pair. However, given the ongoing geopolitical uncertainty, investors are still on edge.
If Tehran fails to reopen the Strait of Hormuz by Tuesday, US President Donald Trump has threatened to demolish Iran's civilian infrastructure, including power plants and bridges. Iran, on the other hand, presented a new requirement, stating that if a portion of the proceeds were set aside to reimburse Iran for damages caused by the conflict, passage via the vital canal may resume. Furthermore, there is still little possibility of an agreement during the next 48 hours.
Investors are nevertheless concerned that the war-related spike in energy prices could revive inflationary pressures and compel major central banks, such as the US Federal Reserve (Fed), to take a more aggressive posture. In fact, traders are now factoring in a higher likelihood that the Fed will increase borrowing prices in 2026, which might support the USD. Bullish traders should exercise cautious as this could limit the upside for the NZD/USD pair.
Due to limited liquidity following the Easter Monday holiday in many international financial markets, traders are now anticipating the release of the US ISM Services PMI for some boost later in the North American session. However, before declaring that the NZD/USD pair has made a near-term bottom and positioning for any further appreciating move, it is wise to wait for any follow-through buying given the underlying background.
