NZD/USD Rallies Above 0.6000 on Middle East Ceasefire, Fed Dovishness

NZD/USD Surges Above 0.6000 as Geopolitical Tensions Ease, Dovish Fed Lifts Risk Sentiment

June 25, 2025 – Tredu Forex Analysis

The New Zealand Dollar (NZD) has staged a strong rebound against the US Dollar (USD) on Tuesday, climbing above the key psychological level of 0.6000. This marks a more than 1% daily gain and nearly 2.5% rise from Monday’s lows, as markets breathe a sigh of relief following the announcement of a ceasefire between Iran and Israel.

Middle East Ceasefire Sparks Relief Rally

US President Donald Trump declared a “complete and total ceasefire” in the Middle East after days of military escalation, including US airstrikes on Iranian nuclear facilities and Iran’s retaliatory missile attacks. Tehran responded diplomatically, with its Foreign Minister stating Iran will halt attacks if Israel stops its airstrikes. Tel Aviv confirmed it had achieved all intended military objectives.

The geopolitical détente has significantly boosted global risk appetite, lifting risk-sensitive currencies like the NZD and weakening safe-haven assets such as the USD.

Fed Dovish Tone Undermines USD

Contributing to the Greenback’s decline, recent comments by Fed Governor Michelle Bowman suggested that the US Federal Reserve may cut interest rates in July if inflation remains controlled. Investors now await today’s testimony by Fed Chair Jerome Powell, which could reinforce or challenge this dovish narrative.

Key Highlights:

• NZD/USD breaks above 0.6000, up over 1% intraday.
• Israel-Iran ceasefire drives risk-on sentiment globally.
• Fed’s dovish comments increase rate cut expectations.
• Traders focus on Powell's Congressional testimony for further USD direction.

Related Articles on Tredu:

• US Dollar Index Slumps to 98.00 After Middle East Ceasefire
• AUD/USD Extends Gains on Ceasefire, Strong PMI Data
• Gold Retreats as Risk Appetite Returns Post-Ceasefire