AUD/USD & NZD/USD surge on hot Aussie inflation and hawkish 25 bp RBNZ cut

AUD/USD and NZD/USD strengthen 

The Antipodean currency pairs, AUD/USD and NZD/USD, surged today following a hotter-than-expected inflation reading in Australia and a hawkish rate cut from the Reserve Bank of New Zealand (RBNZ).

Australian inflation update

Ahead of today’s release, there was some uncertainty as Australia transitions from a quarterly to a full monthly consumer price index (CPI) as its primary measure of headline inflation.

Headline inflation rose by 3.8% year-on-year (YoY) in October, up from 3.6% in September. Meanwhile, the trimmed mean measure increased to 3.3% YoY in October, up from 3.2% in September.

Today’s hotter-than-expected figures continue a concerning trend, with both measures of inflation exceeding the Reserve Bank of Australia’s (RBA) target band and revised forecasts (3.3% for headline inflation and 3.2% for trimmed mean for December 2025).

This development is likely to see the RBA keep its cash rate on hold at 3.60% for the foreseeable future, barring a sharp and sudden rise in the unemployment rate. This saw AUD/USD rally from around 0.6470 to a high of 0.6495 at the time of writing on Wednesday, 26 November at 7.37am AEDT.

Australia all groups CPI and trimmed mean chart

RBNZ delivers hawkish cut

Across the Tasman, the RBNZ cut its official cash rate (OCR) by 25 basis points (bp) to 2.25%, as widely anticipated. This brings the RBNZ’s total easing in the current cycle to 325 bp from a peak of 5.50%.

The RBNZ noted that economic activity and labour market indicators are improving:

‘Committee members discussed an improvement in near-term indicators of economic activity from their lows in the June quarter, suggesting a return to modest GDP growth in the September quarter. Feedback from recent business visits suggests that, while activity remains weak, demand has stabilised.’

The committee also acknowledged early signs of stabilisation in labour demand, with job vacancies and total hours worked increasing in the September quarter, resulting in a shift in the RBNZ’s forward guidance from dovish to data-dependent:

‘Future moves in the OCR will depend on how the outlook for medium-term inflation and the economy evolves.’

The more upbeat commentary was reinforced by the RBNZ lowering its OCR terminal rate to 2.20% for June 2026, just below the current OCR rate of 2.25%. This is down from 2.55% in August, prior to the RBNZ’s surprise 50 bp rate cut in October.

AUD/USD technical analysis

Today’s gains in AUD/USD are in line with the outlook outlined in yesterday’s AUD/USD update here.

In that article, we stated that providing AUD/USD ‘remains above the 0.6440 – 0.6420 support band, a recovery remains the base-case scenario.’

Conviction in this view has increased after AUD/USD regained the 200 day moving average, currently near 0.6460, and then rallied above 0.6475, returning to the safety of its seven-month uptrend channel.

These developments open the door for AUD/USD to test initial resistance at 0.6520, with scope to medium-term resistance in the 0.6620 – 0.6630 area.

AUD/USD daily candlestick chart

• _{Source: TradingView. The figures stated are as of 26 November 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}