AUD/NZD marches towards a six-week high at 1.1170 ahead of Australian Inflation

• AUD/NZD is aiming to recapture a six-week high at 1.1168 on higher estimates of Australian CPI.
• Australian inflation for Q2CY22 is seen higher at 6.2% vs. 5.1% reported earlier.
• The RBNZ will measure the performance of its monetary policy decisions through economic parameters.

The AUD/NZD pair is advancing sharply to recapture a six-week high at 1.1168 as a higher consensus for Australian Inflation will compel the Reserve Bank of Australia (RBA) to tighten its policy further. On a broader note, the cross has displayed a sheer upside move after a corrective move to Monday’s low at 1.1053.

In the early Tokyo session, investors have turned sidelines as the extent of the jump in the inflation rate will demonstrate a clear picture of the economic situation and the headwinds the households are facing due to price pressures.

As per the market consensus, the Australian Consumer Price Index (CPI) for the second quarter of CY2022 is seen at 6.2%, higher than the prior release of 5.1%. No doubt, the price pressures are hurting the paychecks of households in Australia and the overall demand would be going through a tough phase. To combat the sky-rocketing inflation rate, the RBA has already elevated its Official Cash Rate (OCR) by a consecutive 50 basis points (bps). Officially, the RBA’s OCR has been elevated to 1.35%.

On the kiwi front, Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr said on Tuesday that it is undertaking a review of its recent performance in conducting monetary policy, as per Reuters. The central bank will scrutiny the condition of inflation and employment catalysts, which will help them to identify the performance of the monetary policy decisions.