AUD/NZD reaches three-year highs near 1.1450 following the RBNZ policy decision

• AUD/NZD marked 1.1445, the highest since September 2022, on Wednesday.
• The Reserve Bank of New Zealand surprisingly decided to cut the Official Cash Rate by 50 basis points to 2.50% in October.
• The Australian Dollar gained support amid the cautious stance of the Reserve Bank of Australia.

AUD/NZD extends its gains for the third successive session, trading around 1.1430 during the Asian hours on Wednesday. The currency cross reached 1.1445, the highest since September 2022, after the Reserve Bank of New Zealand (RBNZ) decided to cut the Official Cash Rate (OCR) by 50 basis points (bps) to 2.50% from 3.00% at its October policy meeting. The decision came as a surprise to markets, which had widely expected the RBNZ to cut the OCR by 25 bps.

The AUD/NZD cross appreciated as the Australian Dollar (AUD) received support from the cautious stance surrounding the Reserve Bank of Australia (RBA). The Australian central bank decided to keep its Official Cash Rate (OCR) unchanged at 3.6% at the September monetary policy meeting. The RBA warned that inflation has proven more persistent than expected, especially in market services, while the labor market remains tight.

University of Melbourne reported on Tuesday that Australia's Westpac Consumer Confidence declined 3.5% month-over-month (MoM) to 92.1 in October, a sharper decline than the previous 3.1% fall, marking the fastest drop since April. ANZ Job Advertisements slipped 3.3% MoM in September, a much steeper drop than the previous decline of 0.3%.

The TD-MI Inflation Gauge data released on Monday suggested that inflation may come in hotter than anticipated in the third quarter, despite the Reserve Bank of Australia's efforts to keep inflation within its 2-3% target range. Furthermore, Australia's Consumer Inflation Expectations will be eyed on Thursday.