Forex - Australia Inflation rises in 2nd quarter. | CountingPips Forex & Currency Trading Blog

July 23, 2008 - Forex Economic News

Forex - Australia Inflation rises in 2nd quarter.

Australia's inflation increased more than expected in the second quarter of 2008 according to data released today by the Australian Bureau of Statistics. Australia's consumer price index increased by 1.5 percent in the second quarter of 2008 following a first quarter increase of 1.3 percent.

The April to June quarter increase brought the annual rate of inflation to 4.5 percent which is the highest level since December of 1995 and well above the Reserve Bank of Australia's 2-3 percent inflation target rate. Economic forecasts had expected the second quarter inflation increase to measure 1.3 percent and the annual rate to reach 4.3 percent.

Contributing to the higher consumer prices for the second quarter were increases in deposit and loan facilities at 9.5 percent and automotive fuel at 8.7 percent. Price decreases in the second quarter were led by fruit at -7.4 percent and vegetables at -6.5 percent.

The Australian dollar, despite the rise in consumer inflation, has been mixed or losing ground the last couple of days in the currency markets. The AUD/USD pair has fallen from a high of almost 0.9800 yesterday to trading below 0.9640 today while the Aussie has been generally mixed verses the other major currencies. The U.S. dollar has been rallying in the currency markets after yesterday's inflation-focused comments from Philly Fed President Charles Plosser that included the declaration that he believed the Fed would need to raise interest rates "rather than later. And I believe it will likely need to begin before either the labor market or the financial markets have completely turned around."

Tags: aud, cpi, inflation, consumer prices, forex trading

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