The
Australian dollar tumbled today after surprisingly weak inflation numbers,
while the US dollar and the yen are in defensive positions in anticipation of
the Fed and BoJ meeting. The Australian dollar fell more than 1% in the
morning and was trading at 0.7635 after data showed that consumer price index
in Australia unexpectedly fell by 0.2% in January to March.
Preliminary
estimates were for a rise of 0.3%. This number increased the speculations that RBA
will defend its inflation target by cutting interest rates. The Australian
dollar rose this month by almost 15% compared to seven year low in January,
thanks to a recovery in commodity prices. Growing expectations of a reduction
in interest rates, however, may stop the rally.
AUD/USD is
trading sharply lower, currently at 0.7592, as ahead of the publication of the
inflation figures the pair plunged with 1.65% to 0.7619.
Meanwhile AUD/JPY dropped below 85 mark, dragging down the aussie with 1.6%.
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