The New Zealand dollar fell back to around $0.585 and is on track for a weekly loss of more than 2%, as investors remained on edge amid a lack of clear progress in US–Iran negotiations. The renewed flare-up in tensions this week, as well as conflicting statements from both sides, highlights persistent uncertainty around a diplomatic breakthrough. The rejection of a US-brokered ceasefire proposal by Iran-backed Hezbollah has further complicated efforts to de-escalate regional conflicts. However, downside pressure on the NZD was partially cushioned by prospects of higher interest rates from the Reserve Bank of New Zealand. Markets continue to price in a July rate hike, with the OCR seen peaking around 3.50% late next year.