- AUD/NZD prints losses on Wednesday in the Asian market.
- RBNZ announces a rate hike and pushes kiwi higher against majors.
- The pair erases early gains on RBA and RBNZ divergence on a monetary policy decision.
The AUD/NZD edges lower in the Asian session on Wednesday. The cross-currency pair fell more than 30-pips in an immediate reaction to the Reserve Bank of New Zealand’s (RBNZ) latest monetary policy decision. It seems the market was already braced up for the event.
At the time of writing, AUD/NZD is trading 1.0463, down 0.04% on the day.
The RBNZ raised its Official Cash Rate (OCR) by 25 basis points to 0.5% during its October monetary policy meeting, as widely anticipated. RBNZ became the first major central bank to raise the interest rate. Nevertheless, the pair failed to sustain the upward momentum and erases all the gains as the market already priced in the event.
The aussie remained pressured after the Reserve Bank of Australia (RBA) kept the cash rate unchanged at a record low of 0.1%. The RBA kept the interests rate at historical lows citing dismal labor market conditions and higher inflation as the major reasons to maintain the accommodative monetary policy whereas RBNZ reduced the monetary stimulus as the Official Cash Rate (OCR) hiked to 0.50% to maintain low inflation and support maximum sustainable employment.
It is worth noting that, S&P 500 Futures are trading lower at 4,324 with 0.23% losses, which is hinting at the risk-off mood in the market.
AUD/NZD additional levels
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