AUD/NZD Cross Hits Thirteen-Year High Amid Mixed Signals

The Australian Dollar reached its highest level against the New Zealand Dollar in thirteen years, after beating expectations in GDP growth and following a rate decision from the Reserve Bank of Australia. The AUD/NZD cross rose to just above 1.2300, but this gain was largely due to a decline in the NZD/USD pair rather than a strong performance by the Australian currency itself.

The data showed that Australia's GDP beat expectations with a growth rate of 0.4%, driven mainly by household spending on electric and hybrid vehicles. However, private investment was flat, and softer imports contributed to the headline figure.

Despite this, the Reserve Bank of Australia has stated that it needs growth to slow down for inflation to decrease, making an upside surprise in growth a complex input rather than a clear signal of tightening monetary policy.

A key test for the AUD/NZD cross will come on Thursday with the release of Australia's trade balance data and China's services survey, which could move the pair more significantly than either central bank's rate decision.