AUD/NZD STICKS TO POST-NEW ZEALAND CPI LOSSES NEAR WEEKLY LOW, LACKS FOLLOW-THROUGH
- AUD/NZD retreats sharply from a nearly two-year peak touched earlier this Wednesday.
- The softer New Zealand CPI print brings forward RBNZ rate cut bets and might cap gains.
- Speculations that RBA could hike rates again should contribute to limiting the downside.
The AUD/NZD cross witnessed an intraday turnaround from the 1.1150 region, or its highest level since October 2022 touched during the Asian session on Wednesday and drops to the lower end of the weekly range in the last hour. Spot prices currently trade around the 1.1085-1.1080 region, down nearly 0.40% for the day.
Data published by Statistics New Zealand earlier this Wednesday showed that the headline Consumer Price Index (CPI) rose 0.4% QoQ compared to 0.6% in the previous quarter and analysts' forecasts. Moreover, the annual CPI inflation rate fell from the 4% YoY rate in the March 2024 quarter to its lowest rate in three years, at 3.3% in Q2. The New Zealand Dollar (NZD), however, rallied across the board following the release of softer data and turns out to be a key factor exerting heavy downward pressure on the AUD/NZD cross.
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