Ella 
In early European trading on Friday, NZD/USD was still facing selling pressure near 0.5880. Risk aversion from rising tensions between Israel and Iran boosted the greenback, weighing on NZD/USD. Meanwhile, the U.S. dollar index (DXY) moved higher above 106.20, approaching its highest level since November 2023.
U.S. officials revealed that Israel carried out military strikes against Iran. Israel told the Biden administration earlier Thursday it would launch an attack on Iran within the next 24 to 48 hours, these officials said. According to CNN, Israeli officials informed the United States that Iran’s nuclear facilities would not be targeted. Investors will be watching developments in geopolitical tensions in the Middle East. Unrest and conflict in the region could boost safe-haven flows, boosting the dollar.
In addition, the higher possibility of the Federal Reserve further delaying interest rate cuts has also provided some support for the dollar. Several Fed officials agreed that U.S. inflation remains high and the Fed needs to be more confident in inflation trends before it considers adjusting policy.
In NZD/USD, data released by Statistics New Zealand showed that New Zealand’s inflation rate continued to decline, but was still above the 1% to 3% target range set by the Reserve Bank of New Zealand. This could convince the Reserve Bank of New Zealand to keep interest rates high for longer, limiting NZD/USD losses.
