Australian And Nz Dollars Strengthen Amid Global Risk Sentiment

On February 26, 2026, the Australian dollar (AUD) and New Zealand dollar (NZD) experienced significant gains, buoyed by a positive shift in global risk sentiment and increasing expectations for a rate hike by the Reserve Bank of Australia (RBA). The AUD reached a high of $0.7130, marking a 0.9% increase overnight, as markets priced in an 80% chance of a rate hike in May, following a surprising inflation reading of 3.8% for January. RBA Governor Michele Bullock emphasized the need for patience, stating, "While a recalibration in policy is appropriate, we do not expect a hiking cycle to extend more deeply into restrictive territory," indicating a cautious approach despite the rising inflation. Analysts predict that after a potential hike in May, rates could stabilize around 4.10% for an extended period before normalizing back towards neutral by 2027 (Business Recorder).