- AUD/NZD rises around 45 pips intraday following the release of upbeat Chinese PMI data.
- The RBA’s decision to keep the rate unchanged and its hawkish outlook do not provide a significant boost.
- Bets on more aggressive RBNZ interest rate cuts favor bulls ahead of New Zealand jobs data on Wednesday.
The AUD/NZD cross reverses a decline in the Asian session to the 1.0990 region and rises to a one-week high on Tuesday in reaction to upbeat data from China. Spot prices hold on to modest intraday gains around the 1.1030 area and move little after the Reserve Bank of Australia (RBA) announced its policy decisions.
Data released Tuesday showed business activity in China’s services sector expanded at the fastest pace in three months during October and the Caixin/S&P Global services PMI rose to 52 from 50.3 in September. This was consistent with the PMIs official releases last week and could be seen as an early sign that China’s big stimulus push is helping to improve business conditions, which in turn provides a nice boost to the Australian Dollar (AUD).
The New Zealand Dollar (NZD), on the other hand, continues its relative underperformance in the wake of growing bets on more aggressive interest rate cuts by the Reserve Bank of New Zealand (RBNZ). Expectations were reaffirmed by the RBNZ’s semi-annual Financial Stability Report, which indicated that economic conditions remain challenging and also warned of the impact of geopolitical tensions on the economy.
The report also noted that rising unemployment is beginning to create acute financial hardship for some households. Additionally, RBNZ Governor Adrian Orr said the real economy is lagging behind in reducing interest rates. Meanwhile, the RBA’s widely anticipated decision to leave the cash rate unchanged at 4.35% and its hawkish outlook failed to impress AUD bulls or provide any significant boost to the AUD/NZD cross.
At the post-meeting press conference, RBA Governor Michele Bullock reiterated that there are still upside risks to inflation and that rates should remain restrictive for the time being. This, in turn, suggests that the path of least resistance for the AUD/NZD cross remains to the upside. Investors now await the release of the quarterly jobs report on Wednesday, which could determine the near-term trajectory of the currency pair.
Economic indicator
RBA interest rate decision
He Bank of Australia announces the interbank interest rate. This rate affects a range of interest rates set by commercial banks, building societies and other institutions for their own borrowers and depositors. It also affects exchange rates. If the Bank of Australia is firm on the economy’s inflation outlook and raises rates, this is bullish for the Australian dollar, while an outlook for reduced inflation pressures will be bearish.
Last post:
Tue Nov 05, 2024 03:30
Frequency:
Irregular
Current:
4.35%
Dear:
4.35%
Previous:
4.35%
Fountain:
Reserve Bank of Australia
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.