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":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t