Australia’s consumer price index climbed 1.3 percent in the first quarter from a year ago, while it rose 0.2 percent from the previous three months, exceeding a 0.1 percent forecast. The 2.3 percent rise in the trimmed median year-on-year CPI also beat the 2.2 percent forecast.
Australia’s dollar gained and moved away from parity with New Zealand’s currency yesterday after the country’s inflation was slightly stronger than forecast, easing pressure on the central bank to cut interest rates.
The Aussie rallied, snapping three-day declines versus the greenback and kiwi dollar, as the consumer-price data reduced the odds of an imminent policy change by the Reserve Bank of Australia. Its minutes yesterday of the April 7 meeting showed the bank saw an advantage in waiting for more economic figures before deciding on further rate cuts.
“This inflation number has given some fresh doubts on whether we get a May cut coming through,” supporting the Aussie, said Chris Weston, chief market strategist in Melbourne at IG Australia, a unit of IG Group Holdings Plc. “The balance of probability for a May cut has shifted, given what we’ve seen.”
The Australian dollar jumped as much as 0.8 percent before trading 0.7 percent stronger at 77.63 U.S. cents as of 11:17 a.m. in Tokyo. It rose 0.6 percent to NZ$1.0114.