AUD/NZD breaks through 1.2493 resistance as an unexpected RBNZ rate hold and surging Australian inflation create a widening policy gap, setting the stage for further gains toward 1.2624.
The AUD/NZD pair experienced a significant breakout above the 1.2489/93 resistance level due to a sharp divergence in monetary policy expectations. Australia's CPI print of 4.3% has solidified market expectations for a November RBA rate hike, while the RBNZ's surprise decision to hold rates at 2.75% in a narrow 4-3 vote weakened the NZD, driving the cross higher.
The surge is primarily driven by the RBNZ's surprise decision to hold rates, which contrasts with the hawkish inflation data coming out of Australia.
Following the breakout above 1.2489/93, the pair is targeting 1.2624 and potentially 1.2845.
The AUD/NZD pair surged past key resistance at 1.2493 following a sharp divergence in central bank policy. While Australian CPI data climbed to 4.3% fueling expectations of a November RBA rate hike, the RBNZ unexpectedly held rates at 2.75% in a narrow vote.
The pair rose due to a policy divergence: Australia's inflation data suggests a potential RBA rate hike, while the RBNZ unexpectedly kept rates unchanged.