AUD/NZD rises toward 1.1200 following RBNZ rate-cut decision

• AUD/NZD appreciated as the RBNZ lowered its Official Cash Rate by 50 basis points on Wednesday.
• Traders will closely monitor RBNZ Governor Adrian Orr's press conference for clues on the central bank's future policy direction.
• Australia's Wage Price Index increased by 0.7% QoQ in Q4 2024, missing the expected 0.8% rise.

AUD/NZD extends its gains for the second successive session, trading around 1.1170 during Asian hours. The upside is driven by the Reserve Bank of New Zealand's (RBNZ) decision to lower the Official Cash Rate (OCR) by 50 basis points (bps) from 4.25% to 3.75%, following the conclusion of the February policy meeting on Wednesday. The decision aligned with the market expectations.

Traders will closely watch RBNZ Governor Adrian Orr's press conference for insights into the central bank's future policy stance. Any dovish signals could add to selling pressure on the New Zealand Dollar (NZD), providing support for the AUD/NZD cross.

However, the upside of the AUD/NZD cross could be restrained as the Australian Dollar (AUD) remains subdued following the Reserve Bank of Australia's (RBA) policy decision on Tuesday. The central bank lowered its Official Cash Rate (OCR) by 25 basis points (bps) to 4.10% on Tuesday, as widely expected, marking the first rate cut in four years.

Reserve Bank of Australia Governor Michele Bullock addressed the media after the policy meeting, stating that it's clear high interest rates have had an impact. However, Bullock emphasized that it's too early to declare victory over inflation. She also noted the unexpectedly strong jobs market and clarified that the market's expectation of further rate cuts is not guaranteed.

Australia's Wage Price Index rose by 0.7% quarter-over-quarter in Q4 2024, below the expected 0.8% increase and the previous quarter's 0.9% rise. On an annual basis, the index grew by 3.2%, slowing from a revised 3.6% in the prior quarter and matching forecasts. This marked the slowest wage growth since Q3 2022.