AUD/NZD refreshes weekly high at 1.1090 despite hawkish RBNZ bets

• AUD/NZD has printed a fresh weekly high at 1.1088 on the upbeat Australian Trade Balance.
• The RBA elevated its OCR by 50 bps, in line with the estimates of the market.
• The RBNZ may reach neutral rates sooner than the other Western leaders.

The AUD/NZD pair has printed a fresh weekly high at 1.1088 in the early Tokyo session. The cross has remained in the grip of bulls for the past two trading sessions after the announcement of the rate hike by the Reserve Bank of Australia (RBA).

RBA Governor Philip Lowe announced a rate hike by 50 basis points (bps) consecutively this week.  The Official Cash Rate (OCR) of the RBA has been elevated to 1.35%. The announcement remained in line with the estimates of the market participants. Price pressures are scaling higher in the Australian economy thanks to the soaring prices of fossil fuels and food products, which have accelerated the inflation rate to 5.1%, recorded for the first quarter of CY2022.

Apart from that, the upbeat Australian Trade Balance has strengthened the aussie against the kiwi dollar. The monthly economic data landed at 15,965M, higher than the estimates of 10,725M and the prior release of 13,248M.

Next week, the Australian employment data will keep investors busy. As per the market consensus, the Employment Change will remain at 25k, significantly lower than the prior print of 60.6k.

On the kiwi front, investors’ focus has shifted to the interest rate decision by the Reserve Bank of New Zealand (RBNZ). Taking into account the runaway inflation, RBNZ Governor Adrian Orr may elevate the OCR further. Currently, the RBNZ’s OCR is 2%. It is worth noting that the RBNZ has elevated its interest rates at a higher pace than the other Western leaders. It will reach its target of neutral rates sooner.