CFD Trading Rate Australian Dollar vs New Zealand Dollar (AUDNZD)

• The AUD/NZD lost ground following the RBNZ's unexpected 25 basis point rate cut on Wednesday.
• The RBNZ Monetary Policy Statement indicates that inflation is decreasing and returning to the 1-3% target range.
• The Australian Dollar advances due to the decreasing likelihood of an RBA rate cut soon.

AUD/NZD breaks its three-day losing streak, trading around 1.0990 during the Asian session on Wednesday. This upward movement is attributed to the Reserve Bank of New Zealand's (RBNZ) unexpected decision to cut its Official Cash Rate (OCR) by 25 basis points to 5.25% at its August meeting. Traders are looking forward to further insights from the press conference and RBNZ Governor Adrian Orr’s speech scheduled for later in the day.

According to the RBNZ Monetary Policy Statement (MPS) summary, inflation is decreasing and returning to the 1-3% target range. Service sector inflation is anticipated to drop further. The committee's decision on additional easing will depend on their confidence that pricing behavior remains aligned with a low inflation environment. The Consumer Price Index (CPI) is expected to stay around the target midpoint in the foreseeable future.

On the Aussie front, recent data shows that Australian wage growth remained elevated in the second quarter, prompting the Reserve Bank of Australia (RBA) to adopt a hawkish stance regarding its policy outlook. This has been supporting the Australian Dollar (AUD) and underpinning the AUD/NZD cross.

Last week, RBA Governor Michele Bullock ruled out the possibility of rate cuts for the next six months. Bullock emphasized that the Australian central bank remains vigilant about inflation risks and is ready to raise rates again if needed.

• AUD/NZD remains stronger following the RBA’s decision to keep the Official Cash Rate at 4.35% at Tuesday’s meeting.
• The upside Australian Dollar could be retrained as the second-quarter inflation data has reduced odds for another RBA rate hike.
• The New Zealand Dollar struggles as the RBNZ is highly expected to deliver an early interest rate cut in October.

AUD/NZD extends its winning streak for the third successive session, trading around 1.0980 during the Asian hours on Tuesday. The AUD/NZD cross appreciates following the Reserve Bank of Australia’s (RBA) monetary policy decision to keep the Official Cash Rate (OCR) at 4.35% for the sixth time. Traders will likely pay close attention to RBA Governor Michele Bullock’s upcoming speech, which could offer insights into the board’s future policy direction.

The Australian Dollar (AUD) could struggle against its peers as the second-quarter inflation data has diminished expectations for another RBA rate hike. Markets estimate an RBA rate cut in November, a move anticipated much earlier than previously forecasted for April next year.

On the Kiwi front, expectations of an early interest rate cut by the Reserve Bank of New Zealand (RBNZ) put pressure on the Kiwi Dollar and support the AUD/NZD cross. This sentiment follows data showing that the domestic annual CPI rate dropped to its lowest level in three years for the June quarter. The RBNZ's next policy meeting is set for August 14, with markets partly anticipating a rate cut then and fully expecting one by October.

Traders will likely watch the release of China’s July Consumer Price Index (CPI) on Friday for new momentum. The CPI is expected to show a 0.4% year-on-year increase. A weaker-than-expected reading of an economic slowdown in China could affect both antipodean currencies, as China is a significant trading partner for Australia and New Zealand.