Despite the RBA’s decision to leave its Official Cash Rate steady at 3.6% in the December meeting, Governor Michele Bullock indicated no imminent rate cuts. The upcoming Australian Trade Balance data could impact the Australian Dollar’s trajectory. <\/p>\n
Meanwhile, the New Zealand Dollar showed firmness against other currencies as the market anticipated the Q4 employment data. Expectations are for a 0.3% rise in employment change and an unemployment rate steady at 5.3%. <\/p>\n
The RBA typically makes interest rate decisions at eight scheduled meetings yearly. A rate hike generally supports the Australian Dollar, while a dovish stance can weaken it.<\/p>\n
With the Reserve Bank of Australia lifting its rate to 3.85%, we are seeing a clear divergence in monetary policy compared to other central banks. This move has pushed the AUD\/NZD exchange rate to a multi-year high near 1.1630. This strengthens the case for continued Australian dollar momentum against the Kiwi dollar in the coming weeks.<\/p>\n
We saw Australian inflation accelerate to 3.8% in December 2025, which is what forced the RBA’s hand today. In contrast, New Zealand\u2019s latest quarterly inflation data from late 2025 showed a slight cooling to 4.5%, suggesting the Reserve Bank of New Zealand can afford to wait. This growing gap between a re-accelerating Australian inflation rate and a slowing New Zealand one is the key driver for traders.<\/p>\n
The immediate focus now shifts to New Zealand’s employment data for the fourth quarter of 2025, due tomorrow. A weak report, confirming a cooling economy, would likely fuel another surge in the AUD\/NZD cross. Traders could consider buying near-term call options on the AUD\/NZD pair to capitalize on this potential for continued upside.<\/p>\n
On Thursday, we will get Australia’s trade balance for December 2025, with consensus pointing to another strong surplus near A$11 billion, similar to figures seen through much of last year. A number this strong would reinforce the view of a robust Australian economy, giving the RBA even more reason to remain hawkish. This suggests the current strength in the Aussie dollar is not just a one-day reaction but has fundamental support.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Australian Dollar strengthens as RBA hikes rates; inflation concerns persist while New Zealand Dollar awaits jobs data.<\/p>\n","protected":false},"author":62,"featured_media":16959,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40777","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40777","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=40777"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40777\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16959"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=40777"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=40777"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=40777"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}