NZ Dollar Rises Amid Risk-On Mood

(RTTNews) - The New Zealand dollar strengthened against other major currencies in the European session on Tuesday amid increasing risk-on mood, as easing crude oil prices allayed concerns about global inflation and the corresponding outlook for interest rates. Markets were also boosted by technology stocks which mirrored their peers on tech-heavy NASDAQ amid renewed optimism about outlook for large AI hyperscalers.

Traders also remain optimistic about diplomatic efforts to help de-escalate tensions in the Middle East ahead of a meeting between US President Donald Trump and Gulf-state leaders on the sidelines of the UN General Assembly later in the week.

Trump indicated potential for a meeting with Iranian President Masoud Pezeshkian in New York, adding that very big things could happen soon and he is in a "deciding mode" on military action.

U.S. President Donald Trump is set to address UN General Assembly later today and is expected to meet his Ukrainian counterpart Zelenskyy on Tuesday as diplomacy falters over wars in Ukraine and the Middle East.

As the Saudi-Houthi conflict rages on, Trump is expected to meet Gulf leaders impacted by the war with Iran to discuss the conflict and focus on plans for a postwar strategy.

An impending summit between the US and China is being eagerly watched by traders for indications of improved ties between the two biggest economies in the world, which might directly help the export-dependent NZD.

Anna Breman, the governor of the Reserve Bank of New Zealand (RBNZ), stated that if oil prices continue to rise, it is anticipated that near-term inflation will be slightly higher than anticipated in the September statement.

Before making its next decision in October, the central bank will evaluate incoming data and world events, according to Breman.

In the European trading today, the NZ dollar rose to a 2-week high of 90.54 against the yen, from an early low of 89.64. The kiwi may test resistance around the 93.00 region.

Against the U.S. dollar and the euro, the kiwi advanced to a 5-day high of 0.5746 and a 1-week high of 1.9952 from an early 2-1/2-month low of 0.5694 and nearly a 3-month low of 2.0138, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.60 against the greenback and 1.98 against the euro.

The kiwi advanced to a 4-week high of 1.2392 against the Australian dollar, from an early 13-year low of 1.2491. On the upside, 1.21 is seen as the next resistance level for the kiwi.

Looking ahead, U.S. ADP employment data, U.S. Redbook report, Eurozone consumer confidence for September and U.S. Richmond Fed manufacturing index for September are slated for release in the New York session.