The New Zealand dollar traded around $0.586 after three consecutive sessions of losses, as flaring tensions in the Middle East kept investors cautious. Fighting in the region intensified earlier this week, raising fears of wider regional instability and prolonged disruptions to energy flows. However, some relief emerged after Israel and Lebanon had agreed to implement a ceasefire contingent on Hezbollah halting its attacks, while President Donald Trump said talks with Iran were going “very well” and could produce outcomes over the coming weekend, despite denials from Tehran. The kiwi was also supported by rising expectations of tighter monetary policy following a hawkish outlook from the Reserve Bank of New Zealand. Markets are currently pricing in roughly an 80% chance of a rate hike in July and about 75 basis points of cumulative tightening over the year, equivalent to three quarter-point increases.