AUD Surges Against NZD as RBA Hikes Rates

The Australian Dollar (AUD) staged a rally against its New Zealand counterpart (NZD) on Tuesday, with the AUD/NZD cross trading just above 1.2400 after recovering from an intraday pullback near 1.2360.

The Reserve Bank of Australia (RBA) raised its Official Cash Rate by 25 basis points to 4.60%, the highest level since 2011, as part of its September monetary policy meeting.

The RBA's decision was in line with market expectations and highlighted ongoing concerns about inflation risks, which provided support for the AUD and subsequently the AUD/NZD pair.

However, market participants remain cautious, with expectations of a Reserve Bank of New Zealand (RBNZ) rate hike on October 28 capping the upside in AUD/NZD.