NZD/USD gains traction above 0.5950 on US-Iran peace deal hopes
- NZD/USD gains ground to near 0.5960 in Thursday’s Asian session.
- Iran is expected to respond to the US proposal on Thursday.
- RBNZ’s Breman said growth is expected to be slightly slower but is still expected this year.
The NZD/USD pair trades in positive territory around 0.5960 during the Asian trading hours on Thursday. The New Zealand Dollar (NZD) strengthens against the US Dollar (USD) following reports that the United States (US) and Iran are close to a deal to end the war. Traders await the release of the US jobs report for April, which is due later on Friday.
CNN reported that Iran is expected to hand over its reply on Thursday to mediators about the US proposal to end the war. Earlier Wednesday, US President Donald Trump said the US has had “very good talks” with Iran over the past 24 hours. A potential agreement with Iran to end the ongoing conflict and reopen the Strait of Hormuz could lift the riskier assets, such as the Kiwi against the USD, in the near term.
The US jobs data for April will take center stage later on Friday. Economists expect a gain of 60,000 jobs for April, while the Unemployment Rate is projected to remain steady at 4.3%. If the report shows stronger-than-expected outcomes, this could provide some support to the Greenback and create a headwind for the pair.
On the other hand, New Zealand’s Unemployment Rate fell unexpectedly to 5.3% in the first quarter (Q1) of 2026 from 5.4% in the previous reading. This report has kept market expectations for a near-term rate hike by the Reserve Bank of New Zealand (RBNZ).
RBNZ Governor Anna Breman said early Thursday that she anticipates slightly elevated near-term inflation. She further stated that growth would be slightly slower but still expected this year.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.