The New Zealand Dollar (NZD) rallied sharply against the US Dollar (USD) on Wednesday, climbing more than 1% and reaching an eight-week high of 0.5953, up from Tuesday's low of 0.5856. This surge was attributed to increased investor risk appetite following comments from US officials suggesting that the war with Iran may be nearing its end. US President Donald Trump announced a pause in the plan to escort vessels through the Strait of Hormuz, citing progress in peace negotiations with Iran, while US Secretary of State Marco Rubio stated that the objectives of the Iran war had been achieved and indicated no interest in resuming hostilities [1].
Technical analysis indicates that NZD/USD broke a key resistance at 0.5930, with bulls now targeting the March 10 high at 0.5965. Further resistance is seen around the 0.6000 level and near 0.6015, while the 0.5930 level is expected to act as support in case of a reversal. Technical indicators such as the 14-period RSI and MACD suggest there is still room for further appreciation [1].
Meanwhile, the US Dollar index (DXY) posted a modest gain of 0.1% to settle at 98.483, supported by safe-haven flows as markets digested a four-week ceasefire in the Middle East and the US downplayed the likelihood of renewed conflict with Iran. However, President Trump also remarked that the Iranian war conflict could persist for another two to three weeks, indicating some ongoing uncertainty [2]. The USD was the strongest against the Canadian Dollar, while it lost 1.02% against the NZD [1].
On the economic front, US job openings were little changed in March, hiring rebounded, and new-home sales picked up, while services expansion cooled in April. NY Fed President John Williams projected that the effect of tariffs on inflation could phase out in coming quarters, though the impact has not fully played out. Fed Governor Michael Barr warned that rising energy costs, already elevated due to increased electricity demand from data centers, could worsen if the Iran war prolongs and the Strait of Hormuz remains closed [2]. Market attention is shifting to upcoming Fed speeches and the US Treasury's quarterly refunding announcement [2].
CONCLUSION
The NZD/USD pair surged to its highest level in eight weeks as easing geopolitical tensions boosted risk appetite, while the US Dollar index saw modest gains on safe-haven demand. Market sentiment remains cautiously optimistic, with technical indicators suggesting further upside for NZD/USD, but ongoing uncertainty around the Middle East and upcoming US economic events could influence future moves.