While the prospect of higher interest rates could leave borrowers with less money to spend, it has come as good news for the Australian dollar.
The Aussie surged above NZ$1.25 this week for the first time in more than 13 years, making holidays across the Tasman more affordable for Australians.
Our currency has gained more than 10 per cent against the New Zealand dollar over the past year, giving Australian travellers greater purchasing power.
Two contrasting economic developments helped drive the latest move.
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Wednesday's stronger-than-expected inflation report pushed the market-implied probability of a Melbourne Cup Day interest rate rise by the Reserve Bank of Australia above 80 per cent, supporting the Australian dollar.
Across the Tasman, the Reserve Bank of New Zealand surprised markets by leaving interest rates on hold.
Like Australia, New Zealand is also grappling with inflation above its central bank's target, with annual consumer prices rising 3.7 per cent.
Differences in interest rate expectations between the two countries have helped push the Australian dollar higher, potentially making a New Zealand getaway better value.
Bigger discounts could be on the way during Black Friday and the Christmas period as many Australian retailers battle for shoppers amid slow sales growth.
The sluggish growth in sales could be a sign that consumers are holding back from spending big during the sales, or that cost of living pressures and the prospect of higher interest rates are weighing on household budgets.
Woolworths CEO Amanda Bardwell told shareholders at the company's annual general meeting (AGM) this week that four in 10 Australians say they often struggle to make ends meet. The supermarket giant estimates groceries account for 10 per cent of household spending among borrowers.
But that hasn't stopped Woolworths from making what its CEO described as a good start to the financial year, with food sales rising nearly 7 per cent in the three months to September. It's doing better than Coles, which reported slower sales growth over the same period at 3.6 per cent, still topping $10 billion in revenue.
It seems that even in tough times, people have to eat — who would have thought?
Betashares investment strategist Hugh Lam told the SBS On the Money podcast that shares in the consumer staples sector have risen about 20 per cent so far this year.
"A lot of companies within there, like Woollies, Coles and even Bega Cheese, are benefiting because these are sectors of the market where people are still going to be spending despite where we are in the economic cycle," Lam said.
For retailers selling more discretionary items, however, the picture isn't as rosy.
This week, Super Retail Group, which owns Rebel, Supercheap Auto, BCF and Macpac, said weaker consumer confidence and pressure on discretionary spending had weighed on its business.
It specifically pointed to higher petrol prices as a factor behind the decline in quarterly like-for-like sales at outdoor retailers BCF and Macpac.
JB Hi-Fi, which also operates The Good Guys and kitchen and bathroom retailer e&s, reported negative comparable sales growth across its Australian businesses.
It highlights the pressures many businesses in the discretionary sector — selling wants rather than needs — are facing in this economic climate.
"I think what this means … is potential discounting from these retailers which is of course going to hit margins," Lam said.
"And that's because higher interest rates mean that there's less discretionary money everyday Australians can spend on."
Even Bunnings, owned by Wesfarmers, has seen sales growth moderate, according to Wesfarmers CEO Rob Scott at the company's AGM.
But he said the group's Kmart business was performing well as shoppers increasingly sought value.
For consumers, that could mean more bargains during Black Friday and Christmas sales, as retailers compete harder for every dollar.
AI chatbot Claude's owner, Anthropic, lodged its prospectus this week as it prepares to list on the US sharemarket.
The filing offered investors a detailed look at the company's extraordinary revenue growth, mounting expenses and the risks associated with developing increasingly powerful artificial intelligence.
Among the most serious risks identified were "catastrophic or existential risks to humanity, particularly if such (AI) systems were misused, replicated, weaponized [sic], or allowed to operate with a high degree of autonomy".
Loftus Peak chief investment officer Alex Pollack told the SBS On the Money podcast that other potentially catastrophic threats already exist, including nuclear and cyber risks.
"But the question you’ve got to ask yourself is, what is the probability of those risks happening?" Pollack said.
But buried among the warnings was another risk with more immediate implications for the millions of people using AI chatbots for free.
Anthropic warned that its marketing strategies, including free trials and free subscription tiers, might fail to deliver sufficient financial benefits.
"If the costs of supporting free users exceed the value we derive from their eventual conversion or other benefits such as network effects and word-of-mouth referrals, our business, financial condition and results of operations could be adversely affected."
Could that eventually mean an end to free access?
The prospectus doesn't suggest Anthropic has made such a decision, but it does highlight the financial challenge of offering expensive AI services at no cost.
Anthropic reported revenue of US$16.28 billion ($23.12 billion) in the six months to the end of June 2026, compared with US$1.16 billion ($1.65 billion) in the same period a year earlier.
But that extraordinary growth comes with enormous costs.
The company spent nearly US$9 billion ($12.78 billion) on computing and infrastructure over those six months, accounting for more than half its total operating expenses.
It's a reminder that while AI chatbots might be free for many people today, the technology powering them is anything but cheap.
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