The New Zealand dollar briefly rose to a two-week high on Tuesday after inflation surpassed the central bank's forecasts in the third quarter, while its Australian cousin hovered around a recent three-week high. The New Zealand dollar climbed 0.4 percent to $0.7217 after official data showed the consumer price index (CPI) picked up 0.5 percent in the three months to the end of September, after a flat reading the previous quarter.
The annual pace of growth was 1.9 percent, beating analysts' expectations for a 1.8 percent rise. The kiwi was, however, unable to sustain those gains and was last down 0.1 percent at $0.7163 as the uptick in consumer prices was driven largely by housing and food costs while signs of inflation were evasive elsewhere.
That means the data is unlikely to waver the Reserve Bank of New Zealand's (RBNZ) determination to keep interest rates at record lows for some time yet, economists said. Across the Tasman Sea, the Australian dollar was steady at $0.7848, not far from a three-week high of $0.7897 touched on Friday.
The Aussie was supported by upbeat views on the economy by the country's central bank, implying further cuts in interest rates were not warranted. At the same time, the Reserve Bank of Australia (RBA) was also nowhere close to considering a rate hike. New Zealand government bonds eased, sending yields 2.5 basis points higher along the curve. Australian government bond futures slipped, with the three-year bond contract off 1 tick at 97.880 while the 10-year contract fell 1.5 ticks to 97.21.
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