NZD/USD Falls As Risk Aversion Rises Amid Geopolitical Tensions, Trading Below 0.5900

In Asia on Tuesday, the New Zealand dollar/US dollar depreciated to around 0.5880 as geopolitical tensions in the Middle East escalated and investors turned to the U.S. dollar for safe haven. Traders are awaiting Israel’s response to Iran’s air strikes over the weekend. In addition, traders are also waiting to see New Zealand’s consumer price index (CPI) data for the first quarter of 2024, which is scheduled to be released on Wednesday. Markets expect inflation to rise slightly to 0.6% quarter-on-quarter, compared with the previous reading of 0.5%.

According to Chinese state media, the foreign ministers of China and Iran recently held a telephone conversation, in which the Iranian foreign minister expressed Iran’s willingness to exercise restraint and said it did not want the current situation to escalate further. In addition, China strongly condemns and firmly opposes the recent attack on the Iranian Embassy in Syria, believing it to be a serious violation of international law and “unacceptable.”

NZD/USD failed to get any response from mixed Chinese data, as New Zealand has close trade ties with China. In the first quarter of 2024, China’s GDP grew at a quarterly rate of 1.6%, compared with a growth rate of 1.0% in the previous quarter. The GDP annual rate was 5.3%, exceeding expectations of 5.0% and the previous value of 5.2%. Meanwhile, China’s industrial production rose at an annual rate of 4.5% in March, compared with market expectations of 5.4% and the previous reading of 7.0%.

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