The New Zealand dollar held in positive territory, with NZD/USD near 0.5690 in European trading as markets waited for New Zealand’s Q3 CPI. Forecasts point to annual inflation easing to 3.8% from 4.1%, while quarterly CPI is expected at 0.8% versus 1.5% in Q2. Oil’s recent rise is seen lifting price pressures into Q4, and swap markets are pricing nearly an 80% probability of the RBNZ taking the policy rate to 3.00% at next week’s meeting.
US Dollar and Market Sentiment
The US dollar stayed supported by safe-haven demand as oil steadied, while diplomacy chatter around the US and Iran remained unresolved. Rate expectations in the US remained finely balanced: CME FedWatch pricing implies an 85% chance of the Fed holding next week, alongside an 88% chance of a December hike. In rates, the move centred on the long end as 10-year Treasury yields fell 3.0bps to 5.11%, while 2-year yields rose 0.4bps, leaving the front end broadly unchanged.
