Australia Inflation jumps in first quarter. Aussie climbs. | CountingPips Forex & Currency Trading Blog

April 23, 2008 - Forex Economic News

Australia Inflation jumps in first quarter. Aussie climbs.

Australia's inflation increased more than expected in the first quarter of 2008 according to data released today by the Australian Bureau of Statistics. Australia's consumer price index increased by 1.3 percent in the first quarter of 2008 following a fourth quarter of 2007 increase of 0.9 percent. The first quarter increase brought the annual rate of inflation to 4.2 percent which is the highest level in almost 7 years and well above the Reserve Bank of Australia's 2-3 percent inflation target rate. Economic forecasts had expected the first quarter inflation increase to measure 1.1 percent and the annual rate to reach 4.0 percent. Increases in the price of fuel, pharmaceuticals and electricity were contributors to the rising inflation.

The new inflation data will put renewed pressure on the RBA to hold its interest rate in place at 7.25 percent and could push the RBA to further increase the rate. The RBA last increased its interest rate by 25 basis points in March and has increased the rate by 100 basis points since August 2007. The Australian dollar, known as the aussie, reacted positively to the inflation data and gained verses the major currencies today in forex trading. The aussie surged to over a 24 year high against the U.S. dollar as the currency reached the 95.40 U.S. dollars per aussie.

Tags: inflation, australia, consumer price index, cpi, aud, usd

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