AUD/NZD Plunges 1.2% After Hawkish RBNZ Hold and Soft CPI

AUD/NZD has fallen sharply below 1.2200 following the RBNZ's hawkish hold and weaker Australian data on 27 May. The pair had earlier extended its rally to a 13-year high of 1.22494 on 26 May, supported by a widening 2-year yield spread at 1.07%. The RBNZ left the OCR at 2.25% but revealed a 3-3 split and signalled near-term hikes, while headline CPI slowed to 4.2% y/y. This triggered the largest single-day decline since 2022, with the cross dropping more than 1.2% amid narrowing rate differentials.