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Market News AUD/NZD reaches a new weekly high of 1.1090 despite the RBNZ's aggressive forecasts

AUD/NZD reaches a new weekly high of 1.1090 despite the RBNZ's aggressive forecasts

AUD/NZD reached a new weekly high of 1.1088 on the strength of the Australian Trade Balance. The RBA raised its OCR by 50 basis points, in line with market expectations. The RBNZ may attain neutral rates before other Western central banks.

Daniel Rogers
2022-07-08
518

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The AUD/NZD pair reached a new weekly high of 1.1088 in the early Tokyo trading session. The cross has been in the hands of bulls for the previous two trading sessions following the Reserve Bank of Australia's announcement of a rate rise (RBA).

 

This week, RBA Governor Philip Lowe announced a 50 basis point (bps) consecutive rate boost. The RBA has increased the Official Cash Rate (OCR) to 1.35 percent. The announcement was consistent with market participants' expectations. Price pressures are intensifying in the Australian economy due to the skyrocketing prices of fossil fuels and food items, which have pushed the inflation rate for the first quarter of CY2022 to 5.1%.

 

The Australian Trade Balance has strengthened the Australian dollar versus the New Zealand currency. The monthly economic statistics came in at 15,965M, above forecasts of 10,725M and the previous report of 13,248M.

 

The Australian jobs statistics will keep investors busy the next week. According to the market consensus, the Employment Change will continue at 25k, a considerable decrease from the previous reading of 60.6k.

 

On the kiwi front, investors' attention has switched to the Reserve Bank of New Zealand's interest rate announcement (RBNZ). RBNZ Governor Adrian Orr may increase the OCR further in light of the rising inflation rate. Currently, the OCR of the RBNZ is 2%. Notable is that the RBNZ has increased interest rates at a faster rate than other Western leaders. It will accomplish its goal of neutral interest rates faster.


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