Aussie Inflation Comes In Low, Dollar Rallies On Strong Core Data

Sales in Sydney. Don Arnold/Getty Images

Australian inflation for the December quarter has come in below market expectations, printing at 0.2% for the quarter and 1.7% for the year.

The market had forecast just above that level, with 0.3% for the quarter and 1.8% for the year.

The bulk of the low headline number was driven by lower fuel prices.

The weighted median, however, was 0.7% for the quarter and 2.3% for the year – a bit hotter than some expected. The trimmed mean was 0.7% and 2.2%, in line with expectations. The Aussie dollar has risen sharply against the US dollar on the data. Here’s the chart:

It’s a judgment by the market that the RBA has time to wait before cutting interest rates (and there’s probably some traders caught in a short squeeze).

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.