Insights 
VT 
The AUD/NZD pair remains strong near its highest level since September 2022, following the Reserve Bank of Australia’s (RBA) decision to leave interest rates unchanged. The pair maintains a positive trajectory for the seventh consecutive day, trading above mid-1.1400s, with a 0.15% daily gain.
The RBA’s decision to keep rates steady followed a surprise inflation rebound, with new forecasts projecting inflation to hit 3.7% by mid-next year, decreasing to 2.6% by the end of 2027. This outcome has lessened expectations for a rate cut in the next year and supports the Australian Dollar’s strength compared to the New Zealand Dollar (NZD).
New Zealand Rate Expectations
In New Zealand, traders anticipate a potential rate cut at the RBNZ meeting on November 26, partly due to US tariffs impacting the economy. Despite signs of oversold conditions, the AUD/NZD is expected to continue its upward trend, with any pullback viewed as a potential buying chance.
The RBA’s next interest rate decision will be awaited with interest as a hawkish or dovish stance can influence the Australian Dollar. The interest rate remains steady at 3.6%, aligning with market expectations from previous releases.
We’re seeing a clear split between the Australian and New Zealand central banks, which points to continued strength in AUD/NZD. The RBA held rates at 3.6% today but signaled concern about inflation, which we saw jump to 3.9% annually in the last Q3 2025 report. This divergence makes a compelling case for being long the Aussie against the Kiwi in the weeks ahead.
Investment Strategy Considerations
In contrast, market pricing implies a high probability of a rate cut by the RBNZ at its November 26 meeting. This view is supported by recent data showing New Zealand’s economy barely grew, with Q3 2025 GDP coming in at a sluggish 0.1%. These economic headwinds are weighing heavily on the Kiwi.
For the coming weeks, we believe buying AUD/NZD call options is a straightforward way to position for a move towards the 1.1500 level. This strategy allows for participation in the upside while defining risk to the premium paid. Looking at options with expirations after the November 26 RBNZ meeting could capture potential volatility from that event.
We should be mindful that the cross is technically overbought after rising for seven straight days. Waiting for a small pullback towards the 1.1400 level could offer a better entry point for establishing new long positions or for selling NZD call options against the Aussie. This patient approach can help manage risk on entry.
Our bullish view is further supported by recent CFTC data, which shows speculative traders have been building their net long Australian dollar positions. This current policy divergence stands in contrast to what we saw back in 2022, when most central banks were moving in lockstep to raise rates. Today’s split creates a clearer directional opportunity for the pair.
