NZD/USD remains hesitant around 0.5800 after Iran turns down US ceasefire offer

NZD/USD Holds Steady Amid Middle East Tensions

NZD/USD is trading near the 0.5800 mark during Thursday’s Asian session, as the New Zealand Dollar faces downward pressure. This comes after Iran dismissed a ceasefire proposal and a 15-point peace plan put forward by US President Donald Trump, fueling worries about ongoing instability in the Middle East.

According to Iran’s Fars news agency, Tehran currently views negotiations and a truce as unfeasible. The Wall Street Journal (WSJ) further reported that Iran insists its main demands be addressed before entering direct talks with the US. These demands include closing all American military bases in the Gulf, compensation for attacks, removal of sanctions, unrestricted development of its missile program, and recognition of Iran’s control over the Strait of Hormuz.

Heightened uncertainty regarding the future of the Middle East conflict has prompted investors to seek safer assets like the US Dollar. The US Dollar Index (DXY), which measures the dollar against six major currencies, remains strong at around 99.65, holding onto gains from Wednesday.

Besides geopolitical risks, expectations that the Federal Reserve will maintain its current monetary stance without easing this year are also supporting the US Dollar.

New Zealand’s Monetary Policy Outlook

Meanwhile, New Zealand’s central bank continues to warn about persistent inflation and maintains flexibility regarding future policy moves. Reserve Bank of New Zealand Governor Anna Breman commented earlier this week that the bank is cautious about responding too quickly to inflationary pressures, but also wary of waiting too long if inflation proves to be more enduring, according to Reuters. She emphasized that both rate hikes and cuts remain possible given the uncertain global landscape.