Bullish
AUD/NZD holds above 1.23 as RBA's hawkish stance supports Australian dollar.
The Australian dollar remains strong against the New Zealand dollar, with the AUD/NZD pair holding above the 1.23 level. This strength is attributed to the Reserve Bank of Australia's (RBA) hawkish stance on inflation, which has bolstered expectations of further rate hikes. In contrast, the Reserve Bank of New Zealand's (RBNZ) recent rate hike was perceived as less aggressive, leading to a 'sell the fact' reaction in the New Zealand dollar.
Key points
- RBA Deputy Governor Andrew Hauser's emphasis on persistent inflation risks has increased market expectations for additional rate hikes, potentially as soon as the September 28–29 meeting.
- The RBNZ's recent rate hike to 2.75% was anticipated, and the lack of strong forward guidance led to a 'sell the fact' reaction, weakening the New Zealand dollar.
- Recent Australian economic data, including a Services PMI rise to 53.2 and a Composite PMI increase to 52.7, indicate firming private sector activity, but these figures alone are not major market movers.
Sources
AI-generated from public news sources. Not financial advice.
