Forex News

Live Forex news from all over the world.


Aussie Rallies on Q1 CPI Data

April 23, 2008 at 10:53 by Andriy Moraru

Australian dollarThe Australian dollar reached a fresh 24-year high against the U.S. dollar today as the consumer prices in Australia soared above the market’s expectations in March and are now pressing on the central bank to go for the further interest rate hikes.

March CPI was reported at 4.2% (annual rate) — highest inflation rate in more than 4 years. The market analysts expected a 4.0% growth rate.

On the traders’ bets that the Reserve Bank of Australia will have to increase the key interest rate from the current 7.25% to curb the inflation, the Aussie’s value against USD rose above 95 cents.

Australian interest rate is already one of the highest among the developed economies, which makes this currency an attractive investment for the so called carry trades. The expectations for the next rate hike spurred AUD’s growth not only against the falling dollar, but also against the euro and the yen.

AUD/USD reached its maximum rate since March 1984 at 0.9540; the daily growth started at 0.9137 and as of 8:41 GMT the currency pair is trading at 0.9529. AUD/JPY reached its maximum value since February 29 — 98.30 today. EUR/AUD slid to 1.6744 — a new minimum for this pair since March 19.

If you have any questions, comments, or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

Leave a Reply