AUD/NZD scales above 1.1040 on hawkish RBA, interest rate hikes to 0.35%

• AUD/NZD has climbed to near 1.1044 as RBA has featured a rate hike by 25 bps.
• An unexpected hawkish tone from the RBA has set the antipodean on fire.
• Kiwi bulls are awaiting the release of the employment data.

The AUD/NZD pair has surged above 1.1040 as the Reserve Bank of Australia (RBA) sounded hawkish in its monetary policy meeting. RBA Governor Philip Lowe has stepped up its interest rates for the very first time since the pandemic of the Covid-19.

Australian central bank has unexpectedly elevated its interest rates by 25 basis points (bps) to 0.35%. The extent of the rate hike is higher than the preliminary estimate of 15 bps. An aggressive tone has been adopted by the RBA to leash the roaring inflation. The Australian Bureau of Statistics reported the yearly Australian inflation at 5.1%, much higher than the estimates of 4.6% and the prior print of 3.5%. Higher price pressures have compelled the RBA to feature a hawkish tone. As per the commentary from RBA Lowe, the agency is committed to doing whatever is necessary to ensure that inflation in the aussie area could return to target over time.

Meanwhile, kiwi bulls are eyeing the release of the Unemployment Rate, which is due on Wednesday. The NZ jobless rate is expected to land at 3.2%, in line with the previous figure. Adding to that, Statistics New Zealand will report the Employment Change at 0.1%. While the aussie area will report monthly retail sales on Wednesday. A preliminary estimate for monthly Retail Sales is 0.6% against the prior print of 1.8%.