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AUD/NZD breaks above May high as RBA September hike odds jump

Markets now assign a 71.2% probability to an RBA hike in September, and the debate has narrowed to whether the move comes on September 29 or in November.

Reported · Written up by our desk · Major Pairs

Markets are increasingly pricing an additional rate hike from Australia’s central bank, lifting the probability of a September move to 71.2%, according to Action Forex. Every forecaster cited in the piece expects another increase, with the main disagreement now focused on timing rather than whether the next hike happens.

The repricing coincided with a move in AUD/NZD, which broke decisively above 1.2283, the May high, and resumed a longer-term advance. While the article cautions that charts cannot prove causation, the timing is consistent with a relative-rate shift, driven by revised expectations for Australian tightening and continued market reluctance to match New Zealand’s latest hike with an equally aggressive path.

Action Forex points to commentary from RBA Deputy Governor Andrew Hauser as a catalyst for the reassessment. Hauser said the Bank faces a major inflation problem, noting inflation has stayed above target long enough that the RBA board will eventually decide it is “long enough,” and he described the RBA’s slower pace as aimed at preserving jobs.

RBA Assistant Governor Sarah Hunter reinforced the focus on domestic inflation pressures, citing services, rents, and construction, along with higher oil prices. The piece also notes that crude above $90 has already been overtaken by Brent above $100, keeping attention on the persistence and pass-through of the energy shock into the inflation outlook.

Latest closeWTI crude $97.01 ▲4.3%|Brent $102.05 ▲4.2%

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