European markets were more resilient amid hopes of an interest rate cut from the European Central Bank.
Indian inflation slowed last month, boosting hopes of an interest rate cut when the central bank meets later this month.
China announced its interest rate cut for both interbank lending and deposit rates to 6.31% and 3.25%, respectively, effective Friday.
Thursday's interest rate cut, designed to combat a three-year debt crisis, will not stimulate economic growth in the bloc, they say.
This was a clever move ahead of Thursday's interest rate cut which meant savers getting even less return on their money.
This could take the form of an interest rate cut, if the euro appreciated too far since this could lead to deflation.
"November's lower than-expected inflation data keeps the door open for another interest rate cut early in 2008, " said Global Insight economist Howard Archer.
Wall Street seems to expect another interest rate cut this year.
In comments following the bank's widely anticipated decision to leave its benchmark interest rate unchanged at 0.75 percent, Draghi confirmed that an interest rate cut was discussed.
The figure is still above the ECB's target to keep inflation below 2%, but the lower-than-expected number could fuel calls for an interest rate cut next week.
Annette Beacher, head of Asia-Pacific research at TD Securities, said the data wouldn't be enough to swing the RBA into action on Tuesday with an interest rate cut.
The chancellor agreed with Mr King's assessment of inflationary risks and outlook, which some analysts said suggested that an interest rate cut may still be some way off.
Considering that quantitative easing is effectively the same as an interest rate cut below a zero bound, the yield curve is very steep even with 10-year yields just below 2%.
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The precious yellow metal was boosted by the somewhat surprising interest rate cut by the European Central Bank and by more safe-haven investment demand as the EU debt crisis drags on.
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In other words - and this is how most economists would view it - raising the inflation rate is a cheeky way of achieving the same outcome as an interest rate cut.
Meanwhile, with the bailout assured, investors are expecting a bit of turbo power behind it with an interest-rate cut from the Federal Reserve, which currently is targeting a 2.0% annual interest rate on overnight money.
So last week's unexpected interest-rate cut by the Fed was of direct help to Argentina.
The monetary tightening that this represents more than offsets the ECB's last interest-rate cut in March.
Troubled businesses and retailers might have expected that the encouraging news on inflation would open the door to another interest-rate cut.
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China's interest-rate cut shows that its government, too, has room for manoeuvre.
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Two years of declining prices have made apartments more affordable to ordinary Chinese, while an interest-rate cut in June has reduced mortgage costs.
Hopes of an interest-rate cut had faded as the Federal Reserve made it plain that inflation, still stubbornly high, topped its list of worries.
The interest-rate cut in Europe was widely expected given the economic climate there, with new strains becoming apparent even in Germany, the continent's economic powerhouse.
Those factors point to the possibility of an interest-rate cut, and Bernanke dovishly raised the prospect of one, but investors seem to have grown tired of waiting.
In Sydney, meanwhile, banking stocks advanced after quarterly inflation data appeared tame enough to keep hopes alive for an interest-rate cut from the Reserve Bank of Australia.
Following the latest interest-rate cut, the housing ministry has also lowered the costs for home buyers of borrowing from a government fund, which is aimed at supporting first-time purchasers.
"It will probably take more than one interest-rate cut to put the economy on an upward trajectory, " said Howhow Zhang, head of research at Shanghai consulting firm Z-Ben Advisors.
On January 5th rumours swept Wall Street that derivatives losses had brought Bank of America low, and that the interest-rate cut had been intended to keep this bank alive.
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