Aussie Dollar Rises After Inflation Rebounded in Second Quarterby
The Australian dollar surged after data showed that inflation quickened, undermining expectations for a rate cut from the central bank next week.
The Aussie gained as much as 0.9 percent to 75.66 U.S. cents, before trading 75.43 as of 11:33 a.m. in Sydney. The trimmed mean gauge of consumer prices rose 0.5 percent in the quarter ending June from the previous three months, data from statistics bureau showed Wednesday. That compared with expectations for a 0.4 percent increase, according to the median estimate in a Bloomberg economist survey.
Australia’s central bank, in its minutes of its July meeting, at which it kept its benchmark cash rate unchanged at a record low of 1.75 percent, signaled it was keeping its policy options open. It predicted the economy probably cooled last quarter, momentum in the jobs market has eased and inflation is set to remain weak.
Traders were pricing in a 48 percent chance of a rate reduction by the Reserve Bank of Australia at its next meeting Aug. 2, compared with 64 percent at the end of last week.