INFLATION

This morning the AUD opens higher at 0.8906 against the greenback regaining more than 1% from an intraday low of 0.8787 on Monday.

Manufacturing expanded in January at its fastest pace since 2004, data showed on Monday, but consumers increased spending only slightly in December, worried by job prospects and the state of the economy.

U.S. manufacturing expanded for the sixth straight month in January to its highest since 2004, data showed on Monday, but U.S. consumers increased spending only slightly in December, worried by job prospects and the state of the economy.

A measure of the manufacturing sector hit its highest level since 2004 last month, but consumer spending grew only slightly as households remained cautious on the economic recovery and any increase in jobs, data showed on Monday.

Consumer spending rose slightly less than expected in December as savings jumped to a six-month high, indicating that households remained too cautious to spend despite an improvement in incomes.

(Corrects month in para 11 to December)Consumer spending rose slightly less than expected in December as savings jumped to a six-month high, indicating that households remained too cautious to spend despite an improvement in incomes.

China has begun moving at the margins to withdraw excess cash from the financial system, as a spike in lending in the first few weeks of the year prompted concerns that credit growth was getting out of hand.

Consumer spending rose slightly less than expected last month as savings jumped to a six-month high, indicating that households remained too cautious to spend despite an improvement in incomes.

China has ordered a further clampdown on excessive bank lending to ensure credit has not illegally entered the stock or property markets as two surveys on Monday showed the mounting challenges faced by policymakers.

Consumer spending rose slightly less than expected in December as households opted to save extra cash, lifting savings to a six-month high, a government report showed on Monday.

China's economy made a strong start to the year, according to a pair of business surveys released on Monday that also underlined the mounting challenge policymakers face to curb inflation.

World shares sank to a three-month low on Monday as concerns about Greece's debts and a reminder of the challenges China faces to curb inflation stung risk demand, helping push the dollar to a six-month high versus a currency basket.

The United States has escaped the danger of a Japanese-style deflationary trap, but it is not yet time to start tightening policy, St. Louis Federal Reserve Bank President James Bullard told the Financial Times.

The Bank of Japan may need to do more on the monetary policy front to stop deflation, the Nikkei daily quoted Japan's Finance Minister Naoto Kan as saying, keeping pressure on the BOJ to help support a fragile economic recovery.

The economic recovery is suddenly looking more robust. If it is going to stay that way, the labor market will need to catch up soon.

A senior Federal Reserve official warned on Friday that the uncertain path of interest rates poses risks for banks inattentive to the match of durations among their assets and liabilities.

The U.S. economy grew at a faster-than-expected 5.7 percent pace in the fourth quarter, the quickest in more than six years, as businesses made less-aggressive cuts to inventories and stepped up spending.

Asian stocks fell for the ninth straight day on Wednesday on fears that China's heightened efforts to rein in soaring credit growth could hamper the global economic recovery.

(Corrects in first line and in text that Asia stocks ex-Japan fell for the 9th straight day, not the 8th)

Standard and Poor's on Tuesday threatened to cut Japan's credit rating unless it produced a credible plan to rein in its soaring debt and lift growth in an economy plagued by persistent deflation.

Japanese Finance Minister Naoto Kan will ask the Bank of Japan to support the economy through flexible monetary policy in a speech in parliament this week, the Nikkei financial daily reported on Tuesday. Kan will make the unusual reference to the central bank's policy in a speech planned for Friday as part of the government's efforts to to overcome deflation, the paper said without citing sources.