Weak Inflation Sinks Australian Currency
Author: James Glynn</br></br>SYDNEY--Australian consumer-price inflation was less than expected in the second quarter, causing the currency to fall on the likelihood that interest rates will be kept on hold for several months at least.</br></br>The consumer-price index rose 0.6% from the first quarter and 3.1% from a year earlier, the Australian Bureau of Statistics said. Economists had expected the CPI to rise 1.0% from the first quarter and 3.4% from a year earlier.</br></br>The Australian dollar fell sharply after the data were released. It was trading at 89.28 U.S. cents late morning in New York Wednesday, down from 90.03 U.S. cents just before the report. Government bond prices rallied.</br></br>Core inflation was a mild 0.5% from the first quarter and 2.7% from a year earlier, well within the tolerances of the Reserve Bank of Australia, which targets inflation between 2% and 3%.