AUD/NZD is holding steady around 1.1550 in Wednesday’s Asian session, after falling more than 0.25% in the previous trading day. The pair remains well below the 1.1590 peak hit on November 10—a high not seen since September 2013.
The Australian dollar has found underlying support amid cautious commentary on monetary policy from the Reserve Bank of Australia. Deputy Governor Andrew Hauser noted on Wednesday that “monetary policy remains restrictive,” though the board is still debating whether conditions have eased enough to warrant a change. He warned that any shift away from a “mildly restrictive” stance would carry significant implications for future decisions.
On the data front, the University of Melbourne reported that Westpac’s Consumer Confidence Index jumped 12.8% in November to 103.8—its strongest non-pandemic reading in seven years and the first time the index has topped 100 since February 2022. The rebound came on the heels of a 3.5% drop in October and reflects improving economic conditions and reduced external headwinds.
Meanwhile, NZD underperformance has also lent support to the cross. Markets now price in roughly a 25-basis-point rate cut by the Reserve Bank of New Zealand in November—taking the cash rate to 2.25%—and assign about a 10% probability to a steeper 50-point reduction. That shift reflects rising unemployment and signs that the NZ economy may be sliding toward a second recession. RBNZ Inflation Expectations, released on Tuesday, remained steady at 2.28% quarter-over-quarter for Q4, comfortably within its 1%–3% target band.
