Aussie Erases Gains on Faster Inflation Growth

The Australian dollar was falling today, but erased its losses as inflation report showed that consumer prices rose faster than was anticipated, decreasing the probability of an interest rate cut.

The Australian Consumer Price Index increased 0.5 percent in the second quarter from the first quarter. The growth was somewhat below the expected 0.6 percent, but much higher than the 0.1 percent increase in the first quarter. The rising inflation shows that the previous interest rate cuts had an influence on the Australian economy and the Reserve Bank of Australia will likely pause cuts.

AUD/USD was down from 1.0224 to 1.0177, but rebounded to 1.0283 as of 11:54 GMT today. AUD/JPY climbed from 79.90 to 80.46.

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