Can the Australian Dollar hold near March 2013 highs against the New Zealand Dollar after Aussie CPI and RBNZ?

Strong buying lifts AUD/NZD on Wednesday as several supportive factors come together.
The AUD and the cross advance as elevated Australian consumer inflation strengthens expectations of an RBA rate hike.
Adding to the cross's gains, the NZD comes under heavy pressure after the RBNZ unexpectedly leaves rates unchanged.

Aggressive buying sends AUD/NZD to its highest level since March 2013 during Wednesday's Asian session, as hotter Australian consumer inflation and an unexpected decision by the Reserve Bank of New Zealand (RBNZ) to keep rates unchanged drive the rally. After reaching the 1.2600 mark, however, the cross gives up some of its sharp intraday gains. It currently trades around 1.2550, nearly 1.5% higher on the day.

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

The New Zealand Dollar (NZD) faced substantial selling pressure earlier today after the country's central bank unexpectedly left the official cash rate (OCR) at 2.75%, with the vote split 4–3. While the accompanying RBNZ policy statement indicated that tighter monetary policy would likely be needed, it made this conditional on the economic outlook. That guidance offers little support to the NZD and does little to check the AUD/NZD pair's strong intraday advance.

By contrast, broad-based gains in the Australian Dollar (AUD) follow domestic consumer inflation data that exceeded expectations. Support also comes from Reserve Bank of Australia (RBA) Governor Michele Bullock, who indicated that the central bank is less prepared to look through the energy-led rise in prices. Her remarks reinforce expectations of an imminent interest rate hike in November, lending further strength to the AUD and keeping the AUD/NZD cross's bulls in favour.

How Is the Australian Dollar Performing Today?

The Australian Dollar (AUD) recorded its strongest performance against the New Zealand Dollar today. The table below sets out its percentage changes against the major currencies listed.

	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%

To read the heat map of percentage movements between major currencies, select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the Australian Dollar on the left and following its row across to the US Dollar gives the percentage change for AUD (base)/USD (quote) in the corresponding cell.