Australian dollar hovers near 13-year high on kiwi as rate outlooks diverge
Published Thu, Sep 3, 2026 · 01:32 PM
[SYDNEY] The Australian dollar held near a 13-year high against the kiwi on Thursday (Sep 3) as markets bet on diverging rate outlooks between the two central banks, though both currencies lost ground to a surging yen amid suspected Japanese government intervention.
The Aussie slipped 0.1 per cent to NZ$1.2227, having jumped 1 per cent overnight to hit a 13-year peak of NZ$1.2285.
That was the biggest daily rise since April 2025 and was largely due to sharp falls in the kiwi after a dovish rate hike from the Reserve Bank of New Zealand (RBNZ) that had markets wagering on a policy hold next month after two straight increases this year.
The kiwi bounced 0.2 per cent to US$0.5863, having fallen 0.7 per cent overnight to as low as US$0.5802, the weakest since Jul 30. Support is around US$0.5762.
“Our long standing dovish view on the RBNZ remains unchanged. We believe 2.75 per cent is terminal in this cycle,” said Faraz Syed, an economist at Citi, adding that market pricing of three more rate hikes still remains high.
“We should see a slowdown in activity indicators over the coming weeks and months that will likely prevent the RBNZ from hiking further.”
The Aussie also drew some support from better-than-expected economic data that added to bets the Reserve Bank of Australia (RBA) will raise interest rates a fourth time at its Sep 28-29 meeting, priced at 55 per cent probability.
It was steady at US$0.7170, after gaining 0.3 per cent overnight. Bulls are targeting the August high of US$0.7208, with a break above that level opening the way to US$0.7280.
Paul Bloxham, chief economist at HSBC, now expects the RBA to hike twice this year to a terminal rate of 4.85 per cent, arguing demand growth is still exceeding growth in the economy’s supply capacity.
Swaps imply a total tightening of 40 basis points from the RBA next year, equivalent to one and a half rate hikes.
In the broader FX market, the yen appreciated sharply, leaving markets alert to the possibility of intervention by Japanese authorities. The Aussie and kiwi lost 0.7 per cent and 0.4 per cent to 113.05 yen and 92.49 yen, respectively. REUTERS
