Earlier this morning, the Australian Bureau of Statistics said the consumer price index rose 0.6% in the January-March (up 2.9% compared to a year earlier). This trailed expectations that the CPI would increase by 0.8%, just as it did in October-December period, according to consensus figures reported by Dow Jones Newswires.
The Australian dollar didn’t like the results one bit, perhaps since they seemed to lower the odds of an interest-rate cut somewhere in the not-too-distant future. Currently, the Reserve Bank of Austraila is targeting consumer inflation of around 2% to 3%. In a swift and violent move, the Aussie dropped to 93.25 U.S. cents from 93.72 U.S. cents after the data.
As for the inflation drivers, the statistics bureau says tobacco, gasoline, education and health care drove the increase, while drops in furniture, auto repair and travel offset the gains.