New Zealand Dollar Struggles Near 11-Month Low

The New Zealand dollar steadied around $0.560 after slipping below the level to a fresh low since November 2025 in the previous session. The currency found limited support from data showing business confidence improved in the third quarter, with a net 43% of firms expecting general business conditions to improve in the coming months, up from a net 8% in the previous quarter, despite higher fuel prices and persistent geopolitical risks. However, a stronger US dollar amid elevated Treasury yields continued to weigh on the kiwi. Uncertainty ahead of the November general election has also added to the headwinds. Currently, markets are pricing in around a 58% chance of a 25-basis-point rate hike to 3.0% by the Reserve Bank of New Zealand later this month, while a December move remains more than fully priced in.

The New Zealand dollar fell to around $0.559, hovering at its lowest level since November 2025, as continued strength in the US dollar weighed on the currency. The greenback rose despite a soft US jobs report on Friday, which tempered expectations for a Federal Reserve rate hike later this month. Meanwhile, elevated energy prices are threatening New Zealand’s already fragile economy, given the country’s reliance on imported energy. While the recent spike in oil prices raised upside risks to inflation and reinforced the case of further rate hikes from the Reserve Bank of New Zealand, it is also squeezing household purchasing power and increasing operating costs for businesses, potentially weakening domestic demand. Political uncertainty ahead of November’s general election has also added to pressure on the currency.

The New Zealand dollar steadied around $0.561, close to its weakest level since November 2025, and was on track for its longest streak of weekly losses since early 2025. The kiwi has been pressured by a strengthening US dollar and a sharp rise in oil prices, which is threatening New Zealand’s fragile economic recovery. While more expensive energy is adding to inflationary pressures and reinforcing expectations of further Reserve Bank of New Zealand rate hikes, it is also eroding household purchasing power and raising business costs, potentially weighing on domestic demand and growth. Political uncertainty ahead of November’s general election has also added another headwind for the currency. The kiwi was down about 0.8% this week, extending its losing streak to six weeks.