March 2013 Highs: Australian Dollar Holds Near These Levels Against New Zealand Dollar Following Australian CPI, RBNZ

Wednesday brings a sharp advance in AUD/NZD as several supportive factors align.
With Australian consumer inflation running hot, stronger RBA rate rise expectations support the AUD and lift the cross.
Adding to the rally, heavy NZD selling follows the RBNZ’s unexpected decision to leave rates unchanged.

AUD/NZD is up nearly 1.5% on the day. Trading around 1.2550, the cross has pared some of its sharp intraday advance to the 1.2600 mark. Strong buying during Wednesday’s Asian session took it to its highest level since March 2013, after hot Australian consumer inflation data and the Reserve Bank of New Zealand’s (RBNZ) unexpected decision to keep rates on hold.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

A 4–3 vote saw the New Zealand central bank unexpectedly leave its official cash rate (OCR) at 2.75% earlier today, putting the New Zealand Dollar (NZD) under heavy selling pressure. The accompanying RBNZ policy statement indicated that tighter monetary policy would likely be needed, subject to the economic outlook. That guidance has provided little support for the NZD or restraint on the strong intraday AUD/NZD rally.

By contrast, stronger-than-forecast Australian consumer inflation data have driven broad-based gains in the Australian Dollar (AUD). Reserve Bank of Australia (RBA) Governor Michele Bullock also indicated less willingness at the central bank to look through the energy-led price surge. Her remarks reinforced expectations of an imminent interest rate rise in November, adding support to the AUD. Together, these developments give AUD/NZD further upward momentum and favour the bulls.

AUD Performance Today

The Australian Dollar (AUD) recorded its strongest gain against the New Zealand Dollar today. Its percentage moves against the major currencies listed are shown below.

	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%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. To read AUD (base)/USD (quote), for instance, start with the Australian Dollar in the left-hand column and follow that row across to the US Dollar. The intersecting cell gives the percentage change.