The New Zealand dollar eased after domestic inflation undershot expectations in the third quarter, snapping NZD\/USD\u2019s five-day rise, though losses were limited by a softer US dollar. The pair traded near 0.5686, down from a one-month high of 0.5711, as US Treasury yields fell across the curve; the 10-year yield slipped below 5.00% after hitting 5.36% earlier this month and was down about 15 bps on the day. The Dollar Index hovered around 101.60 after touching 101.45, while an AI-linked equity sell-off and Middle East-driven energy risks kept attention on the Federal Reserve\u2019s next steps.<\/p>\n\n
Markets are focused on next week\u2019s Fed meeting, where rates are widely expected to be held, even as December hike pricing moderated; the CME FedWatch Tool put the probability at 67.6%, down from about 89% earlier in the day. In New Zealand, CPI rose 0.7% QoQ versus 0.8% forecast and 1.5% previously, while annual inflation slowed to 3.7% from 4.1%, below the 3.8% consensus. Underlying gauges showed 2.8% y\/y for a second straight quarter and CPI ex. petrol at 3.2% y\/y for a fourth, with swaps implying 85% odds of a 25 bps RBNZ move to 3.00% on 28 October and more than 100 bps of tightening over 12 months to 3.75%, against a 2.20%\u20134.10% neutral range.<\/p>\n\n\n\n