AUD\/NZD rose on Wednesday after the RBNZ held policy in a dovish way, which led to NZD selling. The RBA remains more hawkish, with its cash rate at 3.85% versus 2.25% in New Zealand, and the RBNZ projecting any possible tightening no earlier than late 2026.<\/p>\n
Australia\u2019s Q4 Wage Price Index rose 0.8% month on month, adding to inflation-focused attention. The next scheduled events include Australia\u2019s jobs data on Thursday and a speech by Governor Breman.<\/p>\n
AUD\/NZD gained 0.8% and reached 1.1807, the highest level in 12.5 years. The move extended a rise from near 1.1550 and kept price well above the 200-day EMA near 1.1340.<\/p>\n
The Stochastic Oscillator is in the overbought zone, which can point to a pause. Support levels include 1.1710 and the 50-day EMA at 1.1607, while holding above 1.1800 keeps 1.1900 in view.<\/p>\n
NZD drivers include RBNZ policy aimed at 1% to 3% inflation, centred near 2%, plus China-linked demand and dairy export prices. Risk sentiment can also shift NZD, and rate differentials can affect NZD\/USD.<\/p>\n
The significant gap between the Reserve Bank of Australia and the Reserve Bank of New Zealand is the most important factor right now. Yesterday’s dovish hold from the RBNZ widened this policy divergence, making the Australian dollar fundamentally more attractive than the New Zealand dollar. This central bank difference is likely to drive the AUD\/NZD pair for the foreseeable future.<\/p>\n
We\u2019ve just seen today’s Australian jobs data, and it reinforces this view, showing the unemployment rate unexpectedly dropped to 3.8% while the economy added over 40,000 jobs. This strong labor market will keep pressure on the RBA to maintain its hawkish stance against inflation. This contrasts sharply with New Zealand, where the central bank has signalled it is done with tightening.<\/p>\n
Key drivers for the Kiwi dollar are also looking soft, which supports our outlook. China\u2019s latest manufacturing PMI reading came in at 49.2, indicating a contraction in the economy of New Zealand’s largest trading partner. On top of that, global dairy prices have fallen more than 5% across the first few auctions of 2026, weighing on New Zealand’s export income.<\/p>\n
Given yesterday’s sharp rally to over 1.1800, the pair is technically overbought, suggesting we may see a small pullback or consolidation. Therefore, we should not chase the market at these highs but rather look to buy on any dips. The fundamental story of a rising AUD\/NZD remains strong, so any weakness should be seen as a buying opportunity.<\/p>\n
For the coming weeks, we believe buying AUD\/NZD call options is a prudent strategy. This allows us to participate in the expected move towards the 1.1900 level while limiting our downside risk to the premium paid. A strike price near 1.1850 with an April 2026 expiry would provide enough time for the trend to resume.<\/p>\n
We will be watching the 1.1710 area as a key support level for potential entries. Traders should also be mindful of the upcoming speech from RBNZ Governor Breman. While we expect the dovish message to be reinforced, any unexpected comments could cause some short-term price swings.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" AUD\/NZD hit 12.5-year highs as dovish RBNZ spurred NZD selling; hawkish RBA and wages supported.<\/p>\n","protected":false},"author":62,"featured_media":16960,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42237","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\/42237","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=42237"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42237\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16960"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42237"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42237"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42237"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}