Australia, NZ dollars set to extend gains to third week
FXA•Economists warn oil costs may keep inflation elevated
"The real cost of the oil crisis on inflation will come out in the third and fourth quarter data," said Alexandra Turcu, an economist at Kiwibank. "With the way the war in the Middle East is re-escalating at the moment, we can't be confident that the supply shock will pass any time soon."
"Prices will go up, and the Bank's concern is that they won't come back down after the shock is over," she said.
Australian and New Zealand dollars extend weekly gains
The Australian and New Zealand dollars were aiming for a third straight week of gains on Friday as markets scaled back the chance of near-term U.S. rate hikes, though hostilities in the Gulf remained a threat to risk sentiment.
With Brent prices up 17% in just two weeks, an extended throttling of the Strait of Hormuz would greatly complicate policy for the Antipodean central banks.
