NZD/USD Trades Cautiously Around 0.6000 Amid Geopolitical Uncertainty

NZD/USD Trades Near 0.6000 as Markets Await US-Iran Decision

The NZD/USD pair stays pinned to the 0.6000 psychological mark in early Friday European trading. Investors are holding their positions while awaiting clearer signals from Washington regarding potential military action against Iran.

Market Context

White House Signals No Immediate Military Move

• On Thursday, the White House downplayed imminent military action against Iran, stating a decision will come within two weeks.
• This has slightly reduced geopolitical risk and bolstered demand for risk-sensitive currencies like the New Zealand Dollar (NZD).

US Dollar Weakens as Risk Appetite Returns

• The US Dollar Index (DXY) has slipped to 98.60, retreating from Thursday’s high of 99.15, reflecting a dip in safe-haven demand.
• The decline supports minor upside potential in NZD/USD, although the pair remains technically restrained.

Other Key Drivers

PBoC Leaves Rates Unchanged

• The People’s Bank of China (PBoC) held the one-year and five-year Loan Prime Rates at 3.00% and 3.50%, respectively.
• This neutral stance helped stabilize sentiment in Asia-Pacific markets, including support for NZD.

Technical Outlook

• The NZD/USD pair trades within Thursday's range, facing minor resistance at 0.6020 and key support at 0.5970.
• A sustained move above 0.6020 could lead to a short-term bullish breakout, targeting 0.6060.

Related Articles on Tredu.com:

• Geopolitical Risk: Impact on USD and Risk Currencies
• USD Index Falls: What It Means for Major Pairs
• China Holds Rates Steady: Regional FX Reaction