AUD\/NZD trades around 1.2170 during the Asian hours on Wednesday, halting its winning streak that began on March 30. The currency cross inches lower as the New Zealand Dollar (NZD) receives support after the Reserve Bank of New Zealand decided to keep its Official Cash Rate (OCR) unchanged at 2.25% at its April monetary policy meeting.<\/p>\n
Traders widely expected the RBNZ<\/a> to maintain its policy rates<\/a> due to uncertain economic and inflation outlook<\/a>, which could be attributed to the rising oil prices due to the Middle East conflict. Traders will likely observe the RBNZ<\/a> Governor Dr. Anna Breman\u2019s speech at the post-monetary policy meeting press conference due later in the day.<\/p>\n The AUD\/NZD cross advances as the Australian Dollar (AUD) strengthens amid improved global risk sentiment after US President Donald Trump announced a two-week pause in military action against Iran. The decision, made just before a deadline for intensified strikes, includes a \u201cdouble-sided ceasefire\u201d tied to Iran reopening the Strait of Hormuz.<\/p>\n The US-Iran ceasefire may alter the inflation outlook, easing pressure on the Reserve Bank of Australia (RBA) to tighten further. Markets had priced a rate hike toward 4.35% at the May meeting, partly due to elevated energy costs following the Strait\u2019s closure.<\/p>\n Economic Indicator<\/p>\n RBNZ Interest Rate Decision<\/p>\n The Reserve Bank of New Zealand<\/a> (RBNZ) announces its interest rate decision after each of its seven scheduled annual policy meetings. If the RBNZ is hawkish and sees inflationary pressures rising, it raises the Official Cash Rate (OCR) to bring inflation down. This is positive for the New Zealand Dollar (NZD) since higher interest rates attract more capital inflows. Likewise, if it reaches the view that inflation is too low it lowers the OCR, which tends to weaken NZD.<\/p>\n