“Australia’s dollar dropped, halting a two-day gain, after data showed consumer prices increased last quarter by less than economists forecast, giving the Reserve Bank scope to cut borrowing costs further.
The so-called Aussie fell against all but one of its 16 major counterparts after the Bureau of Statistics said the consumer price index advanced 0.2 percent from the previous three months, compared with the median forecast of economists in a Bloomberg News survey of a 0.4 percent increase. The trimmed mean gauge of core inflation rose 0.6 percent from the previous quarter, compared with a forecast gain of 0.7 percent.
The inflation data “does allow the RBA to ease further if it seems necessary,” said Annette Beacher, head of Asia-Pacific research for TD Securities Inc. in Singapore. “The Australian dollar has fallen on the headline just because the outcome was marginally lower than consensus.”
Australia’s dollar dropped 0.3 percent to $1.0538 as of 4:09 p.m. in Sydney from the close yesterday. It fell 0.6 percent to 93.21 yen. New Zealand’s dollar traded little changed at 84.05 U.S. cents and slid 0.3 percent to 74.34 yen.
Yields on Australia’s 10-year government bonds declined six basis points, or 0.06 percentage point, to 3.3 percent.
Traders see about a 47 percent chance the Reserve Bank of Australia will lower its key rate by a quarter percentage point to a record low 2.75 percent at a Feb. 5 meeting, little changed from yesterday, interest-rate swaps data compiled by Bloomberg show….”
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