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Aussie Dips After China Prices Data, NZD Down After RBNZ

Aussie dips in Asia

Investing.com - The Aussie dipped in Asia on Thursday as China prices came in softer at a monthly pace, rising questions on consumer demand and in New Zealand the kiwi took a downturn after the central bank held rates steady.

China's October consumer prices rose 0.1% on month in October, less than the 0.2% gain seen as food prices dropped from a year ago, data showed on Thursday.

On an annual pace, the gain was 1.9%, higher than the 1.8% seen. Producer prices came in at a gain of 6.9% as expected - moving from a low base a year ago.

Also on Thursday Japan reported core machinery orders slumped 8.1%. well below the drop of 1.8% expected for September on month.

NZD/USD traded at 0.6950, down 0.23%. USD/JPY changed hands at 113.97, up 0.08 and AUD/USD traded at 0.7678, down 0.03%.

Earlier, the Reserve Bank of New Zealand held its becnchmark official cash rate steady at 1.75% as expected on Thursday, warning that the inflation outlook was uncertain as a new government pursues new policies.

"The Bank has incorporated preliminary estimates of the impact of new government policies in four areas," RBNZ Governor Grant Spencer said in a statement.

These included new government spending, a homebuilding program, curbs on immigration and increases in the minimum wage.

"The impact of these policies remains very uncertain," the RBNZ said. However, its assumption was that the policies combined would result in more fiscal stimulus than previously

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.04% to 94.81.

Overnight, the dollar traded roughly unchanged on Wednesday as traders fretted over a possibility delay to President Donald Trump’s tax reform plan while a surge in the Canadian dollar weighed on the greenback.

It was a quiet day on the economic calendar for top-tier data, investors milled over media reports suggesting that the Senate GOP are considering a one-year-delay in the implementation of corporate tax cuts.

Also weighing on the dollar was a sharp move higher in the Canadian dollar after housing data topped expectations.

Statistics Canada reported on Wednesday that building permits increased 3.8% in September, confounding expectations for a 0.2% fall while a separate report showed housing starts increased by 222.800 units last month, beating expectations for a 210,000 rise.

The move lower comes as the investor attention shifted to President Donald Trump’s arrival in China, where the president is expected to have lengthy discussions on North Korea with Chinese president Xi Jinping.

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