AUD/NZD bulls move in on 1.1150 but capped despite strong Aussie CPI data
- AUD/NZD bulls perk up on CPI data released from Australia.
- Aussie CPI beats estimates and raises prospects of a more hawkish RBA.
Australia’s third quarter Consumer Price Index has put a bid into AUD crosses. AUD/NZD is trading at 1.1125 and has travelled between a low of 1.1097 and a high of 1.1144. The data has raised expectations that the Reserve Bank of Australia could be more aggressive when it meets next week and hence AUD rallied. Financial markets have all but priced in another quarter-point hike from the Reserve Bank of Australia in November, and cash rates are expected to peak around 4.3%.
Aussie CPI
- Australia Q3 RBA trimmed mean CPI +1.8% QoQ (Reuters poll +1.5 pct).
- Australia Q3 CPI (all groups) +1.8 pct QoQ (Reuters poll +1.6 pct).
- Australia Q3 RBA weighted median CPI +1.4% QoQ (Reuters poll +1.5 pct).
- Australia Q3 RBA trimmed mean CPI +6.1% YoY (Reuters poll +5.6 pct).
- Australia Q3 RBA weighted median CPI +5 % YoY (Reuters poll +4.8 pct).
Meanwhile, Australian and New Zealand currencies are recovering from the concerns about China's prospects under new party leaders and the poor data released as the greenback is falling back below the 111 mark, a level not seen in almost three weeks. Speculation that the Federal Reserve would slow the pace of interest rate hikes later this year boosted appetites for the high beta currencies such as the Aussie and kiwi. This dollar's weakness was seen across the board, with some of the most pronounced selling activity against the British pound as investors welcomed Rishi Sunak as the new UK prime minister.
AUD/NZD technical analysis
So long as the pair stays above the trendline, the price is destined higher beyond 1.1150 and 1.1180 eyed there after.