NEWS / Foreign Exchange

Australian inflation low in Q1

Australian inflation low in Q1

Underlying inflation in Australia was surprisingly subdued last quarter, greatly lessening the risk of another rise in interest rates as early as next week.

The government's consumer price index rose just 0.1 % & in 1st quarter. Expectations were for a rise of 0.6 %.

The largest price rises were for pharmaceuticals, house purchases, secondary education fees and rents.

The most significant offsetting price decreases were for fruit, furniture, overseas holiday travel and accommodation and audio, visual and computing equipment.

The Australian dollar fell below 83 cents on Tuesday after domestic first-quarter consumer price inflation data came below expectations, indicating that the central bank may keep interest rates steady next week.

AUD/USD traded between 0.8240 and 0.8340.

Asian stocks fell in morning trade

Asian stocks eased on Tuesday after a surge in oil prices raised worries that higher energy costs will crimp corporate profits, while a batch of earnings due from firms such as Fanuc kept Japanese investors cautious.

Brent crude surged above USD 68 on Monday on fears of supply disruptions from Nigeria, the world's eighth biggest exporter, after monitors condemned the results of the country's election.

At 0026 GMT, Tokyo's Nikkei average had lost 0.48 %, following a flat finish on Monday. Among the biggest drag on the market, Kao dropped 3.24 % a day after the top household products maker forecast a 6 % fall in annual profit.