AUD/USD, AUD/NZD flows - one for the road
RBA hike, but vote, statement and comments suggest sees this as likely enough
Market now close to echoing a flat outlook, just a small premium in place
AUD/NZD pulls back from recent post RBNZ, CPI spike 1.24~ key support ahead of larger retracement
RBA delivered the almost-fully priced hike as expected but the statement and presser were on the dovish-hike rather than hawkish-hike end of the spectrum, consistent with the notion that the Bank sees itself as likely having done enough and at the end of the tightening process - or at the very least into a likely period of pause to assess.
The vote was split 6-3, with some already favouring a hold, while the statement dropped any references to further increases instead saying it would 'do what it considers necessary to bring inflation sustainably back to target'. Bullard also added it was time to pause and assess, while it was unclear what the next rate move would be.
The mood music then is that the RBA, faced with 'no easy choices', thinks it's probably done enough of the hard ones in the face of a tough labour market, although Bullard does still see 'a bit of a skew' of risks to inflation on the upside. Money markets nudge further towards pricing in a flat outlook from here.
After the sharp ramp up and buy-the-fact out of CPI data and surprise RBNZ outcome, AUD/NZD encouraged further into pullback mode. Spike reversal from 1.26 to 1.24 in recent days has the latter now as key support. Below here will see room for deeper pullback towards 1.2340, 38.2% Fibonacci retracement (1.2315 and 1.2270 are further below here).