The New Zealand dollar hovered around $0.566, its weakest level since late June, pressured by a broadly stronger US dollar. A series of robust US economic reports, combined with hawkish comments from Federal Reserve officials, has reinforced expectations of further US interest rate increases, bolstering the greenback.
At the same time, President Donald Trump’s rejection of an Iranian proposal to reopen the Strait of Hormuz pushed oil prices higher, stoking global inflation concerns. This has raised the prospect of additional monetary tightening by central banks, including the Reserve Bank of New Zealand (RBNZ).
Markets now largely anticipate a third RBNZ rate hike in October, following Governor Anna Breman’s warning last week that persistently elevated oil prices could drive near‑term inflation somewhat above the central bank’s latest projections. Even so, the US dollar’s strength, underpinned by a firmly hawkish Fed outlook, continues to overshadow any support for the kiwi stemming from rising RBNZ rate-hike expectations.
