The New Zealand dollar traded around $0.569, its weakest level since November 2025, as escalating tensions in the Middle East dampened risk appetite. President Donald Trump set a new deadline for Iran to reopen the Strait of Hormuz, warning that the US would strike the country’s power plants and civilian infrastructure if it failed to comply. Tehran rejected the ultimatum and threatened retaliatory attacks on comparable US-linked assets.
Meanwhile, the Reserve Bank of New Zealand is widely expected to leave the official cash rate unchanged at 2.25% later this week, as policymakers weigh elevated inflation against the economic drag from surging energy prices. Governor Anna Breman recently indicated that the central bank is prepared to look through temporary, energy-driven inflation but could raise interest rates if long-term inflation expectations come under threat.
