AUD/NZD juggles below 1.1060 as investors await RBA monetary policy statement

• AUD/NZD has shifted into a consolidation mode ahead of the RBA’s monetary policy statement.
• The RBA raised its OCR by 50 bps consecutively for the third time to 1.85%.
• A downbeat NZ employment data released this week may keep the kiwi bulls on the tenterhooks.

The AUD/NZD pair is witnessing topsy-turvy moves in a range of 1.1043-1.1075 from Thursday. The market participants are likely to remain on the sidelines as investors are awaiting the release of the monetary policy statement (MoPS) by the Reserve Bank of Australia (RBA).

The minutes from the RBA MoPS will provide a detailed view of Tuesday’s interest rate decision. The investing community should be aware of the fact that RBA Governor Philip Lowe announced a rate hike by 50 basis points (bps) and raised the Official Cash Rate (OCR) to 1.85%. This was the third consecutive 50 bps rate hike by the RBA.

In order to combat the soaring price pressures, the RBA needed to tighten its policy extremely and squeeze liquidity from the market. For the second quarter of CY2022, the inflation rate has landed at 6.1%, significantly higher than the prior release of 5.1%.

On the kiwi front, the ineffectiveness of the kiwi economy in generating job opportunities has created immense trouble for the Reserve Bank of New Zealand (RBNZ). Price pressures are soaring in the NZ economy and the RBNZ was expecting decent performance from the labor market to get strengthened for hiking the Official Cash Rate (OCR) unhesitatingly. Now, crippled RBNZ would resort to a less-hawkish stance on the policy rates.

Stats NZ reported that the Unemployment Rate increased to 3.3% from the estimates of 3.1% and the prior release of 3.2% in the second quarter. Also, the Employment Change for the second quarter has landed at 0%, significantly lower than the estimates of 0.4% and the prior print of 0.1%.