Kiwi Dollar Holds Range Ahead of CPI and Rate Signals

Key Moments

NZD/USD traded nearly unchanged around 0.5665 in early Asian dealings as investors awaited New Zealand’s Q3 CPI data.
The People’s Bank of China kept its one-year and five-year Loan Prime Rates at 3.00% and 3.50% in October.
Markets expected the Federal Reserve to leave interest rates unchanged at its upcoming October 27-28 policy meeting.

NZD/USD Steady Ahead of New Zealand Inflation Data

The NZD/USD pair was little changed near 0.5665 during early Asian trading on Tuesday, with participants largely staying on the sidelines ahead of New Zealand’s Consumer Price Index release on Thursday.

Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway stated that the late October interest rate decision is “wide open,” even as inflation pressures build. The RBNZ has kept the Official Cash Rate at 2.75% after raising it by 25 basis points at its September policy meeting.

Market focus is now on New Zealand’s third-quarter CPI report, which is seen as a key input for the RBNZ’s policy path. Expectations are for CPI to rise 0.8% quarter-on-quarter in Q3, compared with a 1.5% increase in the prior reading. Any upside surprise in inflation could provide support for the New Zealand Dollar against the US Dollar.

PBOC Maintains Loan Prime Rates in October

Elsewhere in Asia, the People’s Bank of China left its Loan Prime Rates unchanged for October on Tuesday. The one-year LPR remained at 3.00%, while the five-year LPR stayed at 3.50%.

Rate	October Level
One-year Loan Prime Rate	3.00%
Five-year Loan Prime Rate	3.50%

Fed Outlook: Markets See Pause as Warsh Emphasizes Data Dependence

Federal Reserve Chairman Kevin Warsh commented during the 2026 IMF annual meetings in Bangkok on Friday that he does not “prejudge” interest-rate decisions, offering no signal on whether the central bank will raise or leave short-term rates unchanged at its October 27-28 gathering.

Investors were looking ahead to the Federal Reserve’s policy announcement next week, with officials expected to keep rates on hold.

New Zealand CPI Seen Above Target as RBNZ Hike Odds Support NZD

Analysts at Brown Brothers Harriman noted that New Zealand’s Q3 CPI data, due Wednesday, are projected to align closely with official estimates. They pointed out that “headline CPI is expected at 0.8% q/q (RBNZ projection: 0.8%) vs. 1.5% in Q2 to be up 3.8% y/y (RBNZ projection: 3.9%) vs. 4.1% in Q2.”

According to Brown Brothers Harriman, this “above target inflation argues for additional RBNZ rate hikes and offers NZD support,” with the swaps curve reflecting “80% odds of a 25bps RBNZ rate hike to 3.00% on October 28.”

New Zealand CPI Metrics	Q2	Q3 Expectation	RBNZ Projection
Headline CPI q/q	1.5%	0.8%	0.8%
Headline CPI y/y	4.1%	3.8%	3.9%

Warsh Highlights Investment and AI Risks While Avoiding Commitments

Fed Chair Warsh’s remarks registered a score of 5.6/10 on the FXS Speechtracker, slightly below the historical average of 6.1/10 and indicating a cautious, data-driven stance. His acknowledgment of being “over-scarred from the global financial crisis” pointed to a continued focus on guarding against downside risks even as he expressed optimism about structural growth and an investment upswing linked to “good policies.”

Warsh’s insistence on not pre-judging the October and December meetings, and on forming views as new information comes in on output, employment, and inflation, kept the US Dollar outlook tied to conditional rather than firmly pre-committed hawkishness.

The FXS Fed Sentiment Index was unchanged, moving 0.00 points to 127.51, a level described as still elevated and suggestive of a policy backdrop that remains firmly hawkish. The combination of a high reading and flat daily change indicated that markets continued to view the Fed as maintaining a strong anti-inflation stance, while Warsh’s comments on AI, financial stability, and tail risks added nuance without altering the core hawkish bias.

Technical Picture: NZD/USD Bias Negative Below 100-Day Moving Average

From a technical standpoint, NZD/USD continues to exhibit a bearish tone on the daily chart as it remains below the 100-day Moving Average. The pair is constrained beneath the upper Bollinger Band while holding above the middle band, a configuration that points to a corrective rebound within a broader downward trend. The 14-day Relative Strength Index at 48.37 has moved back toward neutral, indicating that selling pressure is easing but not yet reversing decisively.

On the upside, initial resistance is located near the upper Bollinger Band at 0.5685, followed by the 100-day Moving Average at 0.5775. A sustained break above this latter level would be needed to alleviate prevailing downside pressure. On the downside, immediate support is seen at the middle Bollinger Band around 0.5630, ahead of the lower band near 0.5575. A clear move below the lower band would likely reopen the path toward new cycle lows.