New Zealand dollar falls 0.56% after US inflation rises in October
Key Facts
The New Zealand dollar fell 0.56% against its US counterpart to $0.56 on November 10, after US inflation data strengthened bets that the Federal Reserve would raise interest rates the following month, according to Reuters. Data from the US Bureau of Labor Statistics showed the consumer price index rose 0.4% month on month in October, after a 0.6% increase in September. The latest monthly reading was slower than the previous month, but did not stop markets from repricing the rate outlook. Reuters said markets priced in a nearly 91% chance of a rate hike in December, based on CME Group’s FedWatch tool. The report’s impact extended to US stocks, which closed lower in the November 10 session.
The core index, which excludes food and energy, rose 0.3% in October, the same monthly increase recorded in August and September, according to the Bureau of Labor Statistics. The reading matters in assessing the direction of price pressures apart from more volatile components, and monthly core inflation reached the level previously cited by Federal Reserve Governor Christopher Waller. Before the October data were released, Waller said he would support considering a half-percentage-point increase if monthly core inflation reached 0.3% or more that month. The Associated Press quoted him as saying that reaching this level would be “a reason to think about raising rates by half a percentage point.” After the data were published, Governor Michelle Bowman said the latest figures pointed to the possibility that price pressures were broadening.
The monthly increase in the consumer price index was driven in part by food, energy and shelter components. The food index rose 0.5% in October, while the energy index climbed 0.7% after a 5.2% increase in September, according to official data. The gasoline index rose 1.0% during the month, following a 9.1% jump in the previous month, reflecting a slower pace of increase in this component compared with September. Shelter rose 0.3% and accounted for more than 30% of the monthly increase in the overall index. This places services and shelter alongside food and energy in the picture of monthly inflation, rather than reducing the reading to gasoline’s movement alone.
The inflation reading was reflected in US stock markets in the November 10 session: the S&P 500 lost 0.4%, the Dow Jones fell 0.3%, and the Nasdaq Composite dropped 0.7%, according to the Associated Press. The agency reported that traders raised their expectations for Federal Reserve rate increases and Treasury yields jumped after the data were released. In Asian trading on November 11, the dollar index rose 0.1% to 102.30, while the New Zealand dollar was steady at $0.5606, according to Reuters. These levels came in a later session than the November 10 move, when the New Zealand dollar fell against the US currency. Reuters said Waller’s remarks, described as hawkish, together with the higher-than-expected inflation reading, helped push the dollar and yields higher.
The Bureau of Labor Statistics did not publish the annual change in the consumer price index for October 2026 for series lacking October 2025 data, after survey data could not be collected that month because of a funding lapse. This gap limits the ability to provide an annual comparison for those series in the report, while the published monthly figures remain the basis for assessing price movements in October. Among upcoming dates, the bureau set December 10, 2026, at 8:30 a.m. Eastern Time for the release of November consumer price index data. The Federal Reserve is also scheduled to hold its next meeting on December 8 and 9, with a Summary of Economic Projections to be released alongside it. These dates place the inflation data and the central bank meeting in the same month, after October’s reading strengthened market expectations for the rate decision.