The New Zealand dollar fell to around $0.581 on Friday, reaching its lowest level in more than seven weeks, hurt by rising risk aversion amid persistent tensions in the Middle East. US President Trump and Iran’s new supreme leader issued defiant statements on Thursday, raising fears that the conflict could become prolonged and prompting more investors to shift toward safer assets. However, the effects of the conflict on oil prices are already filtering through to New Zealand fuel pumps and airfares. As a result, some economists now believe the Reserve Bank of New Zealand may need to tighten policy sooner than previously expected, particularly if inflationary pressures spread more widely across the economy. Markets are currently almost fully pricing in a 25-basis-point rate increase in September, along with more than a 70% chance of another hike in December.