The New Zealand dollar held near a six-week high at $0.584, underpinned by expectations that the Reserve Bank will continue raising interest rates, helping the currency withstand the retreat from risk-sensitive assets amid escalating tensions in the Middle East. Markets continue to price in two additional 25-basis-point rate increases this year, following hawkish signals from the central bank and a string of positive economic data.
Investors are now turning their attention to New Zealand's second-quarter CPI report, with annual inflation expected to reach or even exceed 4%, which would mark its highest level in more than two years, largely driven by higher fuel prices.
The prospect of tighter monetary policy at home has continued to support the kiwi, allowing it to outperform even as intensifying exchanges of attacks between the US and Iran have dampened global risk appetite.