New Zealand’s inflation accelerated sharply in the third quarter, driven by higher fuel prices and weaker currency, beating expectations from 1.5 percent in second quarter to 1.9 percent. It’s close to the Reserve Bank of New Zealand’s target midpoint of 2.00 percent.
On the other hand, Australia’s central bank is watching carefully to ensure banks do not tighten credit too much and imperil the economy at a time when income growth is slow and house prices are falling. Policy meeting showed policy makers upbeat on the economic outlook overall, expecting above trend growth this year and next.
There has been speculation the central bank might even cut interest rates if banks tightened too much or raised their borrowing cost.
US dollar struggled despite weaker equities and broader risk-off sentiments in part as US data overnight suggested consumers were reluctant to spend and US bond yield paused from recent spikes.