Rising risk aversion and the 250 point drop in the Dow has driven the Australian, New Zealand and Canadian dollars lower against the greenback.
New Zealand reported their REINZ house prices, which hit a 7 year low, as record high interest rates start to take a toll on the overall economy. Next week’s retail sales figures are also anticipated to drop, as personal savings grow. In contrast, New Zealand’s consumer prices and food prices should report cheery figures, as dairy prices remain high. With economic slowdown creeping into the picture, RBNZ officials show no remorse, as wage pressures continue to boost inflationary pressures. On the other hand, Australia did not have any releases, but yesterday’s unemployment report indicated that the once resilient economy is starting to weaken. Next week’s depressed home loan and investment lending releases will prove to investors that the housing sector is already in a slump. On the Canadian front, new housing prices grew at a slower pace than anticipated, as the housing market starts to mimic the US housing market. Next week’s CPI releases indicate that inflation is slowly approaching the 2% safety zone, but it should not be a concern for officials.