Australian dollar to the moon on inflation rocket?
DXY is doing a whole lot of sideways. AUD is threatening to jump above CNY and challenge the long-term resistance line at 72 cents. The twins of doom are opposites again. AI metals have no fear, or is that a double top on copper? Big miners not quite so pucker. EM trying again. Not sure The post Australian dollar to the moon on inflation rocket? appeared first on MacroBusiness .
On Wednesday, the AUD/NZD currency pair reached a high not seen since 2013, trading just above 1.2250. The Australian Gross Domestic Product (GDP) surpassed expectations, while the New Zealand central bank decided to keep interest rates unchanged. The cross gained around a quarter of a percent, primarily due to the New Zealand Dollar's decline against the US Dollar.
The Reserve Bank of New Zealand raised its Official Cash Rate (OCR) to 2.75%, which contributed to the move. However, the appreciation of the Australian Dollar was not due to strong growth, but rather the weakening of the New Zealand Dollar. New Zealand is considering a pause in rate hikes, while the Reserve Bank of Australia stated that growth needs to slow for inflation to decrease.
The Australian economy showed some growth, with household spending and discretionary spending increasing, while private investment remained flat. The Chinese services survey also followed at 01:45 GMT. The AUD/NZD pair has been pushed to the ceiling since 2013 and a daily close above 1.2300 would mark a significant milestone, but the resistance level is still strong.
The 1.2200 level serves as support, and a breach of this level would confirm that the recent gain was not driven by strong Australian economic data.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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