Forex Marketz Daily Forex News – Fully Markets Update
The Australian dollar, including the benchmark AUD/USD, were trading higher. The Australian inflation data came in a bit weaker than expected this morning, still the AUD rose against the generally weak US dollar.
The inflation data from the Melbourne Institute and TB Securities, showed that Australia inflation rose by 0.1 percent, monthly, in December. This was below November’s 0.2 percent increase. The annual rate came in at 2.3 percent. This was below the November’s 2.7 percent and the trimmed mean was at 2.2 percent.
Official Australian inflation data are released once every quarter. The TD gauge serves as a monthly reading inflation. The last official CPI, for the third quarter, showed annual inflation rate of 1.8 percent. This continues a trend of lower prices from the first quarter’s rise of 2.1 percent.
The Australian Central Bank watches Inflation Data
The Reserve Bank of Australia, which monitors inflation, looks for inflation at two percent. This is good news for the Aussie dollar. The rise in the benchmark AUD/USD currency pair, after the data, was based on this. The inflation data was not the cause of today’s rise of the AUD. The US dollar is broadly weaker across the board. Financial markets are looking at broad economic recovery and rising interest rate from the Federal Reserve.
The Reserve Bank of Australia wants to keep inflation between 2 and three percent during any given economic cycle. Policy makers in the RBA, might find some solace with the TD numbers. However, official inflation will remain docile. The futures markets are not pricing in any increase to Australia’s key official cash rate (OCR). The Official Cash Rate will probably remain unchanged until the start of 2019. The OCR is currently at a record low of 1.50 percent.
