NZD/USD returns above 0.6000 as the Iran-Israel truce boosts appetite for risk

• The New Zealand Dollar is surfing a relief rally, as geopolitical tensions ease.
• The US Dollar tumbles on risk appetite and dovish comments b¡y fed officials.
• The Focus today is on the Fed Chair Powell's testimony to Congress.

The risk-sensitive New Zealand Dollar is rallying more than 1% on Tuesday and about 2.5% from Monday's lows as the announcement of a ceasefire in the Middle East has triggered a relief rally that sent the US Dollar tumbling.

US President Donald Trump thanked Tehran for the contained response to this weekend's massive attack on some of its key nuclear sites, and announced a "complete and total" ceasefire in the Middle East war.

Iran's Foreign Minister affirmed that Iran will stop its attacks if Israel ceases its airstrikes, while Tel Aviv affirmed that all their targets have been reached, which gives hope of a long-lasting truce.

Dovish Fedspeak is weighing on the USD

In the US, on Monday, Fed Vice Chair of Supervision, Michelle Bowman, suggested that the central bank might cut interest rates as early as July, as she said, Trump's tariffs will likely have a smaller impact on inflation than feared.
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These views echo the comments by Christopher Waller on Friday and have boosted expectations of a rate cut in July or, most likely, in September. Fed Chairman Powell will speak to Congress later today, and the market will be looking for any dovish hint that might add pressure on the US Dollar.

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