• NZD/USD posts a third consecutive daily decline and breaks below the 0.5800 mark.
• Iran’s rejection of a US peace plan revives geopolitical tensions.
• The US Dollar benefits from a risk-off environment and stronger safe-haven demand.

NZD/USD extends its downward move on Thursday, trading around 0.5770 at the time of writing, down 0.65% on the day. The pair is now on its third consecutive day of losses after failing to hold near the 0.5900 area reached last week.

The bearish move is primarily driven by a deterioration in market sentiment, as escalating tensions in the Middle East weigh on risk appetite. Iran has rejected a 15-point proposal from the United States (US) aimed at ending the conflict and denied any ongoing negotiations while military operations continue. At the same time, US President Donald Trump called for more serious talks while warning of stronger military action, further increasing uncertainty. This backdrop boosts demand for the US Dollar (USD) and pressures risk-sensitive currencies such as the New Zealand Dollar (NZD).

Recent military developments, including Israeli strikes in Iran and renewed missile and drone attacks, are fueling concerns about a prolonged conflict. Tehran’s demands, including security guarantees, financial compensation and control over the Strait of Hormuz, further complicate the prospects for a near-term resolution.

On the monetary policy front, HSBC notes that the New Zealand Dollar (NZD) is likely to remain under pressure in the coming weeks despite expectations of further tightening by the Reserve Bank of New Zealand (RBNZ). The bank expects the April 8 meeting to result in a hold at 2.25%. While higher energy prices are supporting local yields, only a clearly hawkish surprise from the central bank could sustainably reverse the NZD’s downward trend.

From a macroeconomic perspective, New Zealand’s calendar remains light, with focus on the Roy Morgan Consumer Confidence survey due later in the day. In the United States, speeches from several Federal Reserve (Fed) officials, which are expected on Thursday and Friday, may add some volatility, although markets remain primarily driven by geopolitical developments.