The AUD/NZD pair continued its upward momentum for the second consecutive session, trading at approximately 1.1170 during the Asian trading hours. This gain follows the Reserve Bank of New Zealand’s (RBNZ) decision on Wednesday to cut the Official Cash Rate (OCR) by 50 basis points, from 4.25% to 3.75%. The rate cut was in line with market expectations and has fueled buying interest in the Australian Dollar (AUD) against the New Zealand Dollar (NZD).
Market participants are now focused on the upcoming press conference by RBNZ Governor Adrian Orr, where any dovish comments on the central bank’s future policy stance could intensify selling pressure on the NZD, further supporting the AUD/NZD cross.
However, the upside potential for the AUD/NZD pair could be limited, as the Australian Dollar remains subdued following the Reserve Bank of Australia’s (RBA) rate cut decision earlier this week. On Tuesday, the RBA lowered its OCR by 25 basis points to 4.10%, marking its first rate cut in four years. RBA Governor Michele Bullock addressed the media after the policy meeting, highlighting that while high interest rates have made an impact, it is still too early to declare victory over inflation. Bullock also mentioned the unexpectedly strong jobs market, signaling that further rate cuts were not guaranteed.
Additionally, Australia’s Wage Price Index rose by 0.7% quarter-over-quarter in Q4 2024, falling short of expectations. On an annual basis, the index increased by 3.2%, which marked the slowest wage growth since Q3 2022.
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