Aussie Holds Firm Near Record High on Divergent Rate Outlook

The Australian dollar held steady near its 13-year high against the New Zealand dollar as markets continued to bet on diverging rate outlooks between the two central banks. Despite a sharp fall in the kiwi, the Aussie slipped just 0.1% to NZ$1.2227, having jumped 1% overnight to hit a peak of NZ$1.2285.

This was the biggest daily rise for the Aussie since April 2025 and was largely due to a dovish rate hike from the Reserve Bank of New Zealand (RBNZ) that led markets to wager on a policy hold next month after two straight increases this year.

Citi economist Faraz Syed believes '2.75% is terminal in this cycle,' saying market pricing of three more rate hikes still remains high, while activity indicators are expected to slow down over the coming weeks and months.