The New Zealand dollar hovered around $0.595 on Tuesday after falling 0.4% in the previous session as escalating US-Iran tensions weakened market sentiment. Treasury Secretary Scott Bessent said the United States was expanding the commercial activities subject to secondary sanctions (penalties affecting third parties) across five sectors of Iran’s economy and imposing new sanctions on nearly 60 entities, individuals and vessels. The measures target alleged support for Iran’s oil revenues, weapons procurement and cyber activities. Weak domestic retail sales also pressured the kiwi by signaling softer consumer demand and raising doubts about the strength of New Zealand’s economic recovery, potentially limiting further monetary tightening. The Reserve Bank of New Zealand is nevertheless widely expected to raise interest rates again in September because inflation remains elevated.