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(Bloomberg) — The dollar strengthened for a second day as a decline in oil prices and concerns about an economic slowdown in China spurred demand for safer assets.

The greenback gained against most of its 16 major peers on Tuesday after data showed Chinese imports declined more than economists forecast. Australia’sdollar dropped Wednesday after a decision by the nation’s second-largest lender to raise its home-loan rates prompted speculation the central bank will respond by easing policy as soon as next month. The kiwifell the most in three weeks after Reserve Bank Governor Graeme Wheeler said interest-rate cuts seem likely even as recent economic indicators have been more encouraging.

“It’s risk off stemming from concerns about China’s economic deceleration, with oil prices capped along with emerging currencies as well as the Australian dollar,” said Masato Yanagiya, head of foreign-exchange and money trading at Sumitomo Mitsui Banking Corp. in New York.

The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 peers, rose 0.1 percent to 1,195.10 as of 9:05 a.m. in Tokyo from Tuesday, when in gained 0.2 percent.

The Aussie fell 0.4 percent to 72.16 U.S. cents after Westpac Banking Corp. said it will increase its variable home- loan rates from Nov. 20, as it announced capital raising on Wednesday in Sydney.

The kiwi was at 66.40 U.S. cents after falling as much as 1.1 percent, the biggest decline since Sept. 21, on Wheeler’s comments.

“Some further easing in the OCR seems likely but this will continue to depend on the emerging flow of economic data,” Wheeler said in the text of a speech in Auckland Wednesday. Last month, he cut the official cash rate to 2.75 percent.
Crude oil prices dropped 6 percent over the past two days.

To contact the reporter on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net Naoto Hosoda, Jonathan Annells