New Zealand Dollar Stays Weak

The New Zealand dollar slipped to $0.559, returning to its weakest level since November 2025, pressured by a firm US dollar. The greenback hovered near a year-and-a-half high following hawkish FOMC minutes and elevated Treasury yields. Concerns about New Zealand’s fragile economic recovery amid high fuel prices and persistent geopolitical risks, as well as domestic political uncertainty, also weighed on the currency. Currently, markets are pricing in a roughly 58% chance that the Reserve Bank of New Zealand will raise its cash rate by 25 bps to 3.0% later this month, while a move in December is more than fully priced in. In other news, the RBNZ has begun searching for two assistant governors and its first-ever chief of staff ahead of Assistant Governor Karen Silk’s departure in mid-December.

The New Zealand dollar traded around 0.561, remaining near its lowest level since November 2025, as investors assess domestic and external developments. 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 firm 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.