Why is the New Zealand Dollar lagging as NZ inflation eases?

The New Zealand Dollar loses ground against its peers as NZ Q3 CPI falls short of expectations.
New Zealand CPI increased 0.7% in Q3, below the 0.8% forecast and the previous quarter’s 1.5% increase.
Renewed strength in the US Dollar has added to pressure on the Kiwi pair.

Selling pressure keeps the New Zealand Dollar (NZD) weaker against its major currency peers on Thursday. During the European session, the currency is down 0.25% against the US Dollar (USD), trading near 0.5679.

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How Is the New Zealand Dollar Performing Today?

The New Zealand Dollar recorded its largest loss against the Japanese Yen. Today's percentage changes in the New Zealand Dollar (NZD) against the listed major currencies appear in the table below.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.14%	0.10%	-0.82%	-0.11%	0.27%	0.42%	-0.39%
EUR	-0.14%		-0.05%	-0.95%	-0.29%	0.12%	0.27%	-0.57%
GBP	-0.10%	0.05%		-0.92%	-0.25%	0.16%	0.31%	-0.50%
JPY	0.82%	0.95%	0.92%		0.69%	1.08%	1.20%	0.41%
CAD	0.11%	0.29%	0.25%	-0.69%		0.39%	0.55%	-0.28%
AUD	-0.27%	-0.12%	-0.16%	-1.08%	-0.39%		0.13%	-0.67%
NZD	-0.42%	-0.27%	-0.31%	-1.20%	-0.55%	-0.13%		-0.78%
CHF	0.39%	0.57%	0.50%	-0.41%	0.28%	0.67%	0.78%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the New Zealand Dollar on the left and following its row across to the US Dollar gives the percentage change for NZD (base)/USD (quote) in the corresponding cell.

Why is the New Zealand Dollar under pressure?

The Kiwi dollar has come under pressure after New Zealand (NZ) reported weaker-than-anticipated Q3 Consumer Price Index (CPI) data.

With headline CPI up “0.7% q/q vs. 1.5% in Q2, below the 0.8% rise forecast by consensus and RBNZ.”, strategists at Brown Brothers Harriman (BBH) say NZ Q3 CPI “undershot expectations,”

Even after the weaker-than-expected reading, the case for further tightening remains intact in BBH's view: “above target inflation and still elevated oil prices argue for additional RBNZ rate hikes.” On market pricing, the strategists point out that “the swaps curve price in 85% odds of a 25bps RBNZ rate hike to 3.00% on October 28 and more than 100bps of tightening over the next twelve months to 3.75% - near the upper end of the RBNZ’s estimated neutral range of 2.20%-4.10%.”

Further pressure on the Kiwi pair has come from signs of a US Dollar recovery. After returning to a three-week low near 101.45, the US Dollar Index (DXY) has rebounded towards 101.66. The index tracks the Greenback against six major currencies.

Investors' attention now turns to October's flash US S&P Global PMI figures, due on Friday.

Can NZD/USD Sustain Its Recovery Above the 20-Day EMA?

A return above the 20-day exponential moving average (EMA) at 0.5661 has given NZD/USD a mildly bullish near-term bias, with the pair trading at 0.5678 at the time of writing. Holding above this short-term trend indicator supports that shift. On the daily chart, the Relative Strength Index (RSI), near 51, has moved back into neutral-to-positive territory. This points to easing downside pressure and suggests the recovery could continue as long as the EMA provides support.

The 20-day EMA at 0.5661 marks the first support on the downside. A break below it would weaken the emerging positive bias and bring the recent lows back into focus. While NZD/USD holds above this average, buyers are likely to step in on dips. The key question for the coming sessions is whether the pair can establish a base for a more lasting rebound.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Which Economic Indicator Is in Focus?

What Does the Consumer Price Index (QoQ) Measure?

Published quarterly by Statistics New Zealand, the Consumer Price Index (CPI) tracks price movements in goods and services purchased by New Zealand households. It serves as an important gauge of inflation and shifts in purchasing trends. The QoQ figure compares prices during the reference quarter with those in the preceding quarter. Markets regard a high reading as bullish for the New Zealand Dollar (NZD) and a low reading as bearish.

Find out more.

Latest release: Wed 21 Oct 2026 21:45

Release frequency: Every quarter

Reported figure: 0.7%

Consensus estimate: 0.8%

Prior reading: 1.5%

Data source: Stats NZ

How Does This Release Affect Traders?

The NZD receives a bullish signal when actual inflation figures exceed forecasts. Statistics New Zealand’s quarterly Consumer Price Index (CPI) release carries considerable weight because the Reserve Bank of New Zealand (RBNZ) targets inflation around the midpoint of 2%. Movements in consumer prices tend to shape the RBNZ’s interest rate decisions, with a substantial knock-on effect on the NZD’s valuation. A pick-up in inflation could prompt the RBNZ to tighten rates more quickly, while slower inflation could have the opposite effect.