The Australian dollar went up against all other major currencies today, as the consumer inflation reports showed higher values than the traders have expected, hinting more hawkish interest rate policy.
The Aussie rose against the US dollar, the yen and the euro today after the CPI data for the second quarter of 2011 were released by the Australian Bureau of Statistics. The inflation was reported at 0.9 percent compared to 1.6 percent in Q1 2011. The economic strategists predicted only 0.7 percent CPI growth in Q2. The currency also rose against the New Zealand dollar.
With the higher inflation numbers, it’s now quite probable that the Reserve Bank of Australia will want to raise the interest rate (from 4.75 percent) at its meeting on August 2. If not at the next meeting, then it will definitely have to conduct more hawkish policy this year.
AUD/USD rose from 1.0956 to 1.1046 as of 11:09 GMT today. AUD/JPY increased from 85.37 to 85.96, while AUD/NZD went up from 1.2560 to 1.2627.
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