AUD/NZD gains with focus on RBA rate decision

The AUD/NZD currency pair edged up on Monday ahead of the outcome of the Reserve Bank of Australia’s policy meeting.

The Reserve Bank of Australia is expected to keep its cash rate intact at 4.35% at its June 16th meeting.

In May, the RBA raised borrowing costs by 25 basis points to 4.35%, as eight members backed the hike, while one policy maker preferred to hold rates at 4.10%.

In its Monetary Policy Statement, the RBA said inflation had surged sharply in H2 2025. It pointed to several drivers, including capacity constraints, higher fuel and commodity prices, and the Middle East conflict.

The Australian central bank has also indicated that further rate hikes are anticipated. Its projections point to a policy rate of 4.70% by the end of 2026, with no reductions expected until 2028.

At the same time, the New Zealand Dollar has drawn support from the Reserve Bank of New Zealand’s abrupt shift to a more hawkish stance.

Reserve Bank of New Zealand Governor Anna Breman had noted that the official cash rate was likely to rise sooner and by a larger amount than previously signaled. She pointed to inflation pressures linked to the Middle East conflict, softer growth and rising input costs in New Zealand.

The central bank’s projections indicate a 25 basis point rate increase at the upcoming July 8th meeting. The RBNZ also suggested that the official cash rate could rise to around 2.85% by year-end, implying as many as three rate hikes over the period.

The AUD/NZD currency pair was last up 0.26% on the day to trade at 1.2103.