The Australian dollar fell against its major peers today after worse-than-expected inflation data released from Australia today. The currency was trading in a range during the past couple weeks following the strong rally that has started at the end of the last year and continued into the beginning of the current year.
The seasonally adjusted Consumer Price Index rose 0.5% in the December quarter from the previous three months versus the forecast value of 0.7%. The trimmed mean CPI was up 0.4% compared to the analysts’ average expectation of 0.5%.
Some economists were arguing that pressure on the Reserve Bank of Australia to cut interest rates are falling, and that should provide support to the Aussie. Others insisted that today’s inflation data gives incentive for the central bank to east its monetary policy further.
In a separate report, the Westpac-Melbourne Institute Leading Index rose in December after showing no change in November.
AUD/USD fell from 0.7579 to 0.7570 as of 20:44 GMT today, though traded far above the daily low of 0.7514. AUD/JPY declined from 86.23 to 85.81. AUD/CHF went down from 0.7583 to 0.7565 but also bounced far from the session minimum of 0.7514.
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