AUD/NZD defies RBA, continues its positive streak for 6th day in a row

• AUD/NZD will gather some impetus from RBNZ Inflation Expectations data amid a light economic week.
• AUD/NZD steady around 1.0400 level, awaits Luci Ellis speech.
• RBNZ last rate hike could be the starting point of more hikes ahead.

AUD/NZD continues its positive streak for the 6th consecutive day in a row on Wednesday. The cross-currency pair seems to be defying the Reserve Bank of Australia's  (RBA's) latest announcement. The pair is trading up by 0.05% at 1.0444 at the time of reporting.

On Tuesday, the RBA Governor Philip Lowe said that Australia is well-placed to tackle the inflationary pressures triggered by COVID-19 without restoring an early cash rate increase. The central bank has pushed back against market pricing for a rate hike in 2022, initially resulting in the decline of the Australian dollar.

“RBA's neutral rate estimate is higher than most,'' analysts at ANZ Bank said, adding, that the ''governor Lowe again pushed back against market pricing of 2022 rate hikes, but his estimate of a neutral cash rate of 2.5% or above will give interest rate bears some cause for comfort." 

It is worth noting, rising new COVID-19 cases in Australia is worrying investors. According to The Guardian, Victoria has recorded 231 new cases in the last 24 hours. Authorities are concerned about any further spread in remote indigenous communities, which could lead to partial lockdowns, negatively affecting the market sentiments.

Previously, at the monetary policy meeting, the Reserve Bank of New Zealand (RBNZ) hiked its Overnight Cash Rate (OCR) by 25 basis points, up to 0.50%. In addition to this move, the bank said it would remove stimulus measures as the New Zealand economy continues its recovery.

As per Reuters, "RBNZ won't stop here. October marks the beginning of a new chapter for the cash rate: Onwards and upwards." Most experts believe in similar rate hikes in November, February, and May. Traders should note that the RBNZ will have its last monetary policy of the year by November 24.

AUD/NZD traders will want to shed some light and gather momentum from the Thursday event amid a light day. The Reserve Bank of New Zealand (RBNZ) Inflation Expectations (QoQ) for Q4 and RBA Assistant Governor Luci Ellis speech is scheduled in the economic docket, which can provide impetus.

AUD/NZD technical levels