Australian dollar hovers near 13-year high on kiwi as rate outlooks diverge

SYDNEY: The Australian dollar held near a 13-year high against the kiwi on Thursday 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% to NZ$1.2227, having jumped 1% 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% to $0.5863, having fallen 0.7% overnight to as low as $0.5802, the weakest since July 30. Support is around $0.5762. “Our long standing dovish view on the RBNZ remains unchanged. We believe 2.75% 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