New Zealand Dollar declines as risk-off mood supports US Dollar

NZD/USD weakens as broad caution and a steady US Dollar kept investors defensive ahead of updates on Iran’s nuclear program.
Fed is widely expected to keep interest rates unchanged at 3.50% to 3.75% in June.
China’s Retail Sales fell 0.6% year-on-year in May, missing expectations of a flat reading.

Akhtar Faruqui FXStreet

NZD/USD extends its losses for the third consecutive day, trading around 0.5810 during the Asian hours on Tuesday. The pair depreciates as the US Dollar (USD) holds steady amid broad market caution. Investors remain on the defensive as they await further updates regarding Iran’s unresolved nuclear program.

Both Washington and Tehran have not released the official text of the agreement; major shipping lines are delaying vessel rerouting through the strategic waterway until full transparency is established.

Even though US President Donald Trump announced that a memorandum of understanding (MoU) has been signed to end the conflict and reopen the blockaded Strait of Hormuz, market participants remain deeply cautious. According to Iran's semi-official Mehr news agency, the current draft calls for the strait to reopen within 30 days under Iranian arrangements.

The Federal Reserve (Fed) is widely expected to keep its benchmark interest rate unchanged at a target range of 3.50% to 3.75% on Wednesday, which could be attributed to the higher US inflation due to elevated energy prices linked to Middle East tensions. Traders will be closely monitoring the press conference for cues on how new Fed Chair Kevin Warsh intends to lead the central bank into its next era.

The New Zealand Dollar (NZD) struggles following a wave of weak economic data out of China. Because China is New Zealand's largest trading partner, buying roughly one-third of all Kiwi goods exports, the New Zealand Dollar acts as a primary liquid proxy for the Chinese economy.

China's domestic demand slumped sharply in May, with Retail Sales contracting by 0.6% year-on-year against expectations of a flat reading. Additionally, Fixed Asset Investment dropped at a faster pace of -4.1%, failing to meet the projected -2%. While Industrial Production offered a minor bright spot by coming in stronger-than-expected at 4.5%.

Economic Indicator

Industrial Production (YoY)

Industrial output is released by the National Bureau of Statistics of China. It shows the volume of production of Chinese Industries such as factories and manufacturing facilities. A surge in output is regarded as inflationary which would prompt the People’s Bank of China would tighten monetary policy and fiscal policy risk. Generally speaking, if high industrial production growth comes out, this may generate a positive sentiment (or bullish) for the CNY, whereas a low reading is seen as negative (or Bearish) for the CNY.

USD/JPY recovers toward 160.50 ahead of BoJ press conference

USD/JPY recovers losses and heads toward 160.50 in early Europe on Tuesday, following the release of the Bank of Japan's monetary policy decision. The BoJ hiked the key rate by 25 bps to 1% as widely, providing little to no impetus to the Japanese Yen. The focus is now on the BoJ Deputy Governor Uchida's press conference.

AUD/USD sticks to red near 0.7050 after RBA's pause

AUD/USD remains in the red near 0.7050 following the Reserve Bank of Australia's (RBA) expected decision to pause its rate hike cycle. The pair assesses RBA Governor Bullock's press conference for a fresh trading impetus.

Gold holds gains above $4,300 amid cautious markets

Gold maintains a mildly positive tone, holding gains after rallying about 6.5% over the last few days. The precious metal's recovery, however, has lost steam after crossing the $4,300 line and remains practically flat as the initial enthusiasm about the US-Iran peace deal faded, with investors awaiting details of the agreement and monetary policy decisions by major central banks.

Solana's rebound gains momentum as ETF inflows return

Solana (SOL) steadies at $73 after posting three consecutive green candlesticks since the weekend. The recent recovery is supported by institutional demand, with spot Exchange Traded Funds recording net inflows of $2.81 million on Monday.

Kevin Warsh opens first Fed meeting June 16 with rate hold expected

Kevin Warsh was confirmed by the Senate in a 54-45 vote and sworn in as Federal Reserve Chair on 22 May 2026. The ceremony took place at the White House, with Supreme Court Justice Clarence Thomas administering the oath. The FOMC meeting on 16 and 17 June is his first as chair. The June meeting is also a quarterly projection meeting.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.