Iran conflict drives NZD lower through March
• The Iran conflict erupted just before March and was the primary driver of financial markets throughout the month
• As the conflict escalated, oil prices spiked, global equities tumbled, and global interest rates surged on renewed inflation fears
• NZD/USD dropped over 4%, and the NZD weakened against all key currencies
Fairly flat February for the NZD
• NZD/USD traded a tight range of 1½ cents in February, ending the month with a small fall
• AUD and CNY clearly outperformed, seeing NZD crosses against these down about 2-2½%
• Lingering risk of war in the Middle East and a dovish-hold by the RBNZ contributed to the NZD’s lagging performance
A sharp recovery for the NZD
• The NZD and AUD enjoyed very strong gains from mid-Jan as the USD collapsed and a global reflationary thematic prevailed
• Investors’ loss of trust in US policy exaggerated market movements alongside the end of the rules-based international order
• Global equity markets stretch to fresh highs; US Treasuries range-bound; NZ-global rate spreads increase