Australian Dollar Up as Prices Rise More Than Expected

The US dollar retreated marginally in early morning trade in Asia while the Australian dollar gained some ground after prices rose more than expected.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies was down 0.03% to 93.92 by 9:40 PM ET (01:40 AM GMT).

The USD/JPY pair was down 0.05% to 114.08. A weakening of the yen since the previous trading session after the country reported slower-than-expected producer price increases on Tuesday has pushed the Japanese currency past the JPY114 level against the dollar, a level that it touched last week for the first time since 2016.

The USD/CNY pair fell 0.04% to 6.3830.

The AUD/USD pair rose 0.34% to 0.7524 while the NZD/USD pair fell 0.17% to 0.7161.

In Australia, core consumer prices rose faster than expected over the last quarter, rising 2.1% in the third quarter, compared to an expected 1.8% rise. The increase puts the measure within the Reserve Bank of Australia’s (RBA) target of 2-3% for the first time in six years, according to the data from the Australian Bureau of Statistics. The increase sent the currency higher after the data was released late in the morning in Sydney.

Australia’s headline consumer price index rose 3% in the third quarter of the year, slightly lower than the 3.1% widely expected, Bloomberg reported.

“The strong rise in underlying inflation will keep pressure on the RBA to keep reducing monetary stimulus in the months ahead,” Ben Udy, an economist at Capital Economics told Reuters.