- NZD/USD weakens as the US Dollar rises amid cautious sentiment ahead of weekend US–Iran talks.
- Washington and Tehran are set to resume talks this weekend, with Trump expressing optimism about progress.
- New Zealand’s annual food inflation eased to 3.4% in March, lowest since February 2025, after 4.5% previously.
NZD/USD remains subdued for the second successive day, trading around 0.5890 during the Asian hours on Friday. The pair weakens as the US Dollar (USD) edges higher, supported by cautious market sentiment ahead of the upcoming meeting between the United States (US) and Iran scheduled for the weekend.
However, discussions between Washington and Tehran are anticipated to resume over the weekend, with US President Donald Trump adopting an optimistic stance on the likelihood that both nations could secure a permanent ceasefire before its expiration next week.
President Trump said on Thursday that he had held conversations with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu. He added that Israel and Lebanon have agreed to implement a 10-day ceasefire, which took effect at 5 PM ET.
In New Zealand, annual Food Inflation moderated to 3.4% in March from 4.5% previously, marking the first decline in three months and the lowest reading since February 2025. On a monthly basis, the Food Price Index declined by 0.6%, following a prior 0.1% decrease.
Meanwhile, UOB economist Ho Woei Chen evaluated China’s stronger Q1 2026 Gross Domestic Product (GDP) data and its policy implications. Despite real GDP expanding by 5.0% YoY, the team maintains its 2026 growth projection at 4.7% amid external headwinds and subdued domestic demand. Robust economic activity alongside contained inflation diminishes the likelihood of near-term rate cuts, with only a modest 10-basis-point easing now expected in Q3 2026. Any shifts in China’s economic outlook could influence the New Zealand Dollar (NZD), given the close trade relationship between China and New Zealand.
