Investing.com - The Australian dollar slumped against its U.S. rival during Wednesday’s Asian session after weaker-than-expected inflation data from down under.
In Asian trading Wednesday, AUD/USD slid 0.30% to 1.0536. The pair was likely to find support at 1.0468, the low of January 7 and resistance at 1.0557, the high of December 18.
Earlier today, the Australian Bureau of Statistics said its consumer price index, a measure of inflation, rose 0.2% in fourth quarter compared with a 1.4% jump in the third quarter. Analysts expected a fourth-quarter increase of 0.4%.
Meanwhile, the Reserve Bank of Australia said that Australian trimmed mean CPI rose to a seasonally adjusted 0.6% in the fourth quarter compared with a 0.7% gain in the third quarter. Analysts expected a 0.7% rise in the fourth quarter.
Australia's annual rate of inflation checked in at 2.2%, within the Reserve Bank of Australia's desired range. RBA lifted its inflation range from 2% in September 2012.
In the days before the CPI numbers were unveiled, traders appeared convinced that a core reading in the 0.5% to 0.6% area could open the door for the Reserve Bank of Australia to lower interest rates again.
Australia's benchmark interest rate is currently 3% following a 25-basis point reduction after the last RBA meeting. RBA next meets in February and the odds are currently even that the central bank will trim rates to 2.75%.
Press reports out today noted the National Australia Bank puts the chances of another rate cut by the RBA at 50% following the CPI data. Leading up the RBA meeting on February 5th, traders see AUD/USD as likely to stay in the 1.05-1.06 range.
Elsewhere, EUR/AUD climbed 0.22% to 1.2637 while AUD/JPY slid 0.46% to 93.31. AUD/NZD declined 0.23% to 1.2538.
In Asian trading Wednesday, AUD/USD slid 0.30% to 1.0536. The pair was likely to find support at 1.0468, the low of January 7 and resistance at 1.0557, the high of December 18.
Earlier today, the Australian Bureau of Statistics said its consumer price index, a measure of inflation, rose 0.2% in fourth quarter compared with a 1.4% jump in the third quarter. Analysts expected a fourth-quarter increase of 0.4%.
Meanwhile, the Reserve Bank of Australia said that Australian trimmed mean CPI rose to a seasonally adjusted 0.6% in the fourth quarter compared with a 0.7% gain in the third quarter. Analysts expected a 0.7% rise in the fourth quarter.
Australia's annual rate of inflation checked in at 2.2%, within the Reserve Bank of Australia's desired range. RBA lifted its inflation range from 2% in September 2012.
In the days before the CPI numbers were unveiled, traders appeared convinced that a core reading in the 0.5% to 0.6% area could open the door for the Reserve Bank of Australia to lower interest rates again.
Australia's benchmark interest rate is currently 3% following a 25-basis point reduction after the last RBA meeting. RBA next meets in February and the odds are currently even that the central bank will trim rates to 2.75%.
Press reports out today noted the National Australia Bank puts the chances of another rate cut by the RBA at 50% following the CPI data. Leading up the RBA meeting on February 5th, traders see AUD/USD as likely to stay in the 1.05-1.06 range.
Elsewhere, EUR/AUD climbed 0.22% to 1.2637 while AUD/JPY slid 0.46% to 93.31. AUD/NZD declined 0.23% to 1.2538.