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[New Zealand Dollar Bulls Break Through Against the Trend, Rate Hike Bets and Geopolitical Premiums Dance Together] ⑴ The New Zealand dollar strengthened against major currencies in early European trading on Thursday, as the market bet on at least one more rate hike by the Reserve Bank of New Zealand this year. Last week, the central bank raised the official cash rate by 25 basis points and hinted at further tightening. ⑵ Investors currently expect two more rate hikes this year, a policy tone that provides core support for the New Zealand dollar, in stark contrast to the cooling expectations for a Fed rate hike. ⑶ Recent slowing US inflation data has weakened market expectations for a Fed rate hike in the near term, but geopolitical risks in the Middle East have pushed up energy prices, raising concerns that interest rates may remain high for an extended period. ⑷ The US-Iran military conflict continues to escalate, with US airstrikes resulting in casualties. Iran has stated it has complete freedom of action, and media reports suggest the US may expand its military operations. (5) The New Zealand dollar rose to a 1.5-month high of 94.98 against the Japanese yen and a 3.5-month high of 1.1948 against the Australian dollar, recovering from the morning lows of 94.59 and 1.1988 respectively. Technically, if the upward trend continues, the target is 96.00 against the yen and 1.18 against the Australian dollar. (6) The New Zealand dollar rose slightly to 0.5858 against the US dollar and 1.9577 against the euro, recovering from the morning lows of 0.5834 and 1.9647 respectively. The next resistance levels are at 0.60 and 1.94 respectively. (7) Tonight's focus will be on US retail sales, weekly jobless claims, the New York Fed Services Activity Index, the Philadelphia Fed Business Conditions Index, business inventories, the NAHB Housing Market Index, and pending home sales data, which may provide short-term guidance for the foreign exchange market.