The New Zealand dollar slipped to around $0.592 on Tuesday, extending its decline from the previous session as weakening risk sentiment outweighed support from expectations of higher interest rates. Investors remained cautious amid ongoing uncertainty surrounding a potential Middle East peace agreement, with conflicting signals from the US and Iran and renewed tensions near the Strait of Hormuz, raising concerns about prolonged geopolitical and trade disruptions. However, losses were tempered by expectations of tighter monetary policy following hawkish signals from the Reserve Bank of New Zealand. Markets are currently pricing in roughly an 80% chance of a rate hike in July and around 75 basis points of cumulative tightening over the year, equivalent to three quarter-point increases.