NZD/USD weakens below 0.6000 ahead of PBOC rate decision

• NZD/USD edges lower to around 0.5990 in Friday's early Asian session. 
• Rising geopolitical tensions boost the US Dollar, a safe-haven currency. 
• The upbeat New Zealand's GDP data might cap the Kiwi's downside. 

The NZD/USD pair loses ground to near 0.5990 during the early Asian session on Friday. The US Dollar (USD) strengthens against the New Zealand Dollar (NZD) amid rising fears over a potential spread of the conflict in the Middle East. Traders brace for the People's Bank of China's (PBoC) interest rate decision and the US Philly Fed Manufacturing Index later on Friday.

The conflict between Israel and Iran has entered its seventh day as two countries carried out further air attacks on Thursday. White House spokeswoman Karoline Leavitt said that US President Donald Trump will decide within two weeks whether to strike Iran. Concerns over potential US involvement in the Israel-Iran air war boost the safe-haven flows, benefitting the Greenback. 

The US Federal Reserve (Fed) left its key borrowing rate unchanged in a range between 4.25%-4.50% at its June meeting on Wednesday. Fed officials retained projections for two quarter-point rate reductions this year. 

Fed Chair Jerome Powell signaled a cautious note about further easing ahead, saying that he expects "meaningful" inflation ahead as a result of Trump's aggressive trade tariffs. The hawkish tone from the Fed contributes to the USD's upside and creates a tailwind for the pair in the near term. 

On the other hand, the stronger-than-expected New Zealand's Gross Domestic Product (GDP) report might help limit the Kiwi's losses. New Zealand's economy grew faster than expected in the first quarter (Q1), rising by 0.8% QoQ versus 0.5% prior (revised from 0.7%). This reading came in above the market consensus of 0.7%.