• NZD/USD attracts some sellers on Tuesday as rising US-Iran tensions benefit the safe-haven USD.
• The USD bulls seem hesitant and opt to wait for the release of the US consumer inflation figures.
• The RBNZ’s hawkish stance could lend support to the NZD and limit further losses for spot prices.

The NZD/USD pair struggles to capitalize on the previous day's move higher and meets with a fresh supply during the Asian session on Tuesday amid a modest US Dollar (USD) uptick. Spot prices slip below mid-0.5900s, though the downside potential seems limited as traders opt to wait for the release of the latest US consumer inflation figures.

The global risk sentiment remains fragile on the back of fading hopes for a potential US-Iran peace deal, which, in turn, benefits the safe-haven USD and exerts some pressure on the NZD/USD pair. US President Donald Trump and Iran both rejected each other’s peace proposals for ending the war amid major disagreements over Tehran's nuclear program and a standoff over the critical Strait of Hormuz.

In fact, CNN reported that Trump has grown impatient with the continued closure of the Strait of Hormuz and that he perceives that division in Iranian leadership is preventing them from making substantial concessions on nuclear negotiations. The report further added, citing Trump aides saying that he is now more seriously considering a resumption of major combat operations than he has in recent weeks.

This keeps geopolitical risks in play and underpins the USD's reserve currency status amid diminishing odds for a further policy easing by the US Federal Reserve (Fed) in 2026. The USD bulls, however, seem hesitant ahead of the crucial US Consumer Price Index (CPI), which will play a key role in influencing the Fed's rate path. This, in turn, would drive the USD and provide a fresh impetus to the NZD/USD pair.

Apart from this, the market focus will be on further developments surrounding the Middle East crisis, which might continue to infuse volatility in the global financial markets. In the meantime, expectations that the Reserve Bank of New Zealand (RBNZ) would maintain a cautious stance or consider tightening to bring inflation back to the 2% midpoint could offer some support to the NZD/USD pair and limit losses.