The Australian dollar sank today as inflation data was unexpectedly weak, leading to speculation about a possible interest rate cut from the Reserve Bank of Australia.
Australia’s Consumer Price Index fell 0.2% in the March quarter from the previous three months while experts had predicted an increase by 0.3%. The Trimmed Mean CPI rose 0.2% on a seasonally adjusted basis — the slowest growth on record. Cash rate futures showed that chances for a 25-point rate cut from the RBA increased from 13% to 50% after the release of the report.
AUD/USD sank 1.6% from 0.7746 to 0.7622 as of 8:35 GMT today. EUR/AUD soared 1.9% from 1.4578 to 1.4850.
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