AUD/NZD shoots to near 1.1000 on a minor fall in kiwi inflation at 6.9%

• AUD/NZD climbs above 1.0990 swiftly after the kiwi CPI misses estimates.
• A minor fall in the NZ inflation will not scale down the hawkish tone of the RBNZ.
• Investors will keep an eye over the S&P Global Manufacturing PMI.

The AUD/NZD pair is experiencing a juggernaut demand as the Statistic New Zealand has reported the yearly inflation print at 6.9%. The numbers have arrived a little lower than the expectation of 7%, which are still keeping the odds of one more hike in the Official Cash Rate (OCR) of the Reserve Bank of New Zealand (RBNZ). Along with this, the quarterly kiwi Consumer Price Index (CPI) figure has dropped to 1.8% against the preliminary reading of 2%.

Last week, RBNZ Governor Adrian Orr elevated its OCR by 50 basis points (bps). This was the fourth consecutive rate hike by the RBNZ, which took its OCR to 1.5%. In a statement, the central bank dictated that this was the biggest rate hike in more than 20 years, whose sole purpose was to reduce the risks of inflation at best. A larger than expected move by the RBNZ will provide flexibility to the central bank in further interest rate decisions. It is worth noting that the RBNZ has been one of the most aggressive central banks, which is bringing the grounded rates to the neutral one quickly.

On the Aussie front, rate hikes by the Reserve Bank of Australia (RBA) are not seen yet as RBA policymakers have not found any price pressures that could force the agency to bring rate hikes on the table. Meanwhile, investors are focusing on S&P Global Manufacturing PMI, which will release on Friday. A preliminary estimate is seen at 57.8 against the prior print of 57.7.