The New Zealand dollar fell to around $0.562 on the first day of October, its lowest level since November 2025, after declining more than 4% in September. Broad-based US dollar strength, rising US Treasury yields and expectations for further Federal Reserve rate hikes outweighed support from increased bets on another Reserve Bank of New Zealand rate hike at its October meeting. Elevated oil prices have heightened inflation risks, while the prolonged Middle East conflict threatens New Zealand’s economic recovery and has further weakened sentiment toward the currency. September business confidence also deteriorated as higher fuel prices weighed on the outlook.