Key Moments
- AUD/NZD jumped to its highest level since March 2013 during the Asian session before easing toward 1.2550.
- Stronger-than-expected Australian consumer inflation and hawkish RBA expectations provided a powerful boost to the Australian Dollar.
- The RBNZ’s surprise decision to leave the OCR at 2.75% in a 4-3 vote weighed heavily on the New Zealand Dollar.
Australian Dollar Extends Rally Versus New Zealand Dollar
The AUD/NZD cross advanced sharply during Wednesday’s Asian trading, drawing robust buying interest and propelling the pair to its strongest level since March 2013. The surge followed hotter Australian consumer inflation figures and a surprise decision from the Reserve Bank of New Zealand (RBNZ) to leave interest rates unchanged. After touching the 1.2600 area, the pair pared some intraday gains and was last seen around 1.2550, still higher by nearly 1.5% on the day.
RBNZ On Hold Pressures the New Zealand Dollar
Earlier in the session, the New Zealand central bank unexpectedly kept its official cash rate (OCR) steady at 2.75% in a closely split 4-3 vote. The decision exerted substantial downward pressure on the New Zealand Dollar (NZD). In its policy statement, the RBNZ indicated that tighter monetary settings are likely to be needed but emphasized that this will depend on how the economic outlook evolves. The guidance failed to provide meaningful support for the NZD or to slow the AUD/NZD pair’s strong intraday advance.
Hotter Australian CPI Fuels RBA Rate-Hike Speculation
In contrast, the Australian Dollar (AUD) strengthened broadly after domestic consumer inflation data exceeded expectations. Market participants responded by increasing bets that the Reserve Bank of Australia (RBA) could move rates higher. Sentiment was further reinforced after RBA Governor Michele Bullock signaled that the central bank is less inclined to overlook the recent energy-led rise in prices, which bolstered expectations for a potential interest rate increase in November. This backdrop has given additional momentum to the AUD/NZD cross and continues to favor bullish positioning.
Australian Dollar Performance Against Major Currencies
The following table shows intraday percentage changes of the Australian Dollar against major counterparts, highlighting that the AUD was strongest versus the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.05% | 0.02% | 0.09% | -0.08% | 1.47% | 0.11% | |
| EUR | -0.02% | 0.03% | -0.02% | 0.07% | -0.09% | 1.44% | 0.09% | |
| GBP | -0.05% | -0.03% | -0.04% | 0.03% | -0.14% | 1.42% | 0.06% | |
| JPY | -0.02% | 0.02% | 0.04% | 0.08% | -0.08% | 1.45% | 0.10% | |
| CAD | -0.09% | -0.07% | -0.03% | -0.08% | -0.16% | 1.37% | 0.03% | |
| AUD | 0.08% | 0.09% | 0.14% | 0.08% | 0.16% | 1.55% | 0.19% | |
| NZD | -1.47% | -1.44% | -1.42% | -1.45% | -1.37% | -1.55% | -1.32% | |
| CHF | -0.11% | -0.09% | -0.06% | -0.10% | -0.03% | -0.19% | 1.32% |
The heat map above is arranged so that the base currency is taken from the left-hand column and the quote currency from the top row. For instance, selecting the Australian Dollar in the left column and moving horizontally to the US Dollar cell gives the percentage change for AUD (base)/USD (quote).
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