The Aussie Dollar is trimming some of the previous day’s losses against the NZD on Wednesday. The pair has returned to levels 1. 1500 after bouncing from the middle range of the 1. 1400s, favoured by a weak Kiwi Dollar, as recent data from Australia and New Zealand has confirmed some RBA-RBNZ monetary policy divergence. New Zealand’s Producer Price Index disappointed on Tuesday. Input prices have shown a weaker-than-expected 0. 2% increase in the three months to September, following a 0. 6% growth in the previous quarter and undershooting market expectations of a 0. 9% growth. These figures, coupled with the country’s weak economic growth, -New Zealand’s economy shrank 0. 9% in the second quarter- are feeding expectations that the central bank will cut interest rates further at its next monetary policy meeting, due next week. Australian data, on the other hand, revealed that wage prices remain steady, growing at a 0. 8% pace in Q3 and 3. 4% year-on-year. In both cases, showing steady growth rates from the second quarter. These figures support the RBA’s cautious monetary policy stance, as reflected in the minutes of its November meeting. The committee members showed a cautious approach to monetary policy and hinted at steady interest rates unless incoming data shows evidence of a weakening economic growth.
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AUD/NZD trims losses and returns above 1.1500 as the Kiwi sells-off
